Salaam - IMF sees MENA inflation cooling in 2025 and 2026
Assalamu alaikum - quick summary of the IMF outlook for our region.
Lower energy costs, plus fiscal tightening and subsidy reforms, are expected to bring inflation down across the Middle East and North Africa to about 12.2% in 2025 and 10.3% in 2026, the IMF says. That’s a decline from around 14.2% in 2024.
Gulf countries continue to show relatively low inflation thanks to steady exchange rates and cautious fiscal policies. The GCC’s average inflation is projected at roughly 1.7% in 2025 and 2% in 2026, showing the bloc’s resilience to global price shocks. Saudi Arabia’s CPI is forecast near 2.1% in 2025 and 2% in 2026. The UAE is expected around 1.6% in 2025 and 2% in 2026, and Qatar about 0.1% in 2025 and 2.6% in 2026.
But some countries still face very high inflation - for example, Iran’s rate is projected above 40% in 2025, Kazakhstan stays elevated, Sudan faces the region’s highest figures (though easing from 2024), and Egypt’s inflation is expected to cool from the high 30s to about 20.4% in 2025.
The broader MENA-plus region (including Afghanistan and Pakistan) is seen at about 11.2% in 2025 and 9.8% in 2026, down from 15.2% in 2024.
On growth: the IMF expects GDP in MENA to expand by about 3.3% in 2025 and 3.7% in 2026. The MENAP area is forecast to grow near 3.2% in 2025 and 3.7% in 2026, helped by higher oil output, rising domestic demand, and reforms. The GCC is seen growing around 3.9% in 2025 and 4.3% in 2026.
Among oil exporters, stronger-than-expected production after OPEC+ adjustments supports growth - roughly 3% in 2025 and 3.4% in 2026. Saudi growth is put at about 4% for both years, and the UAE around 4.8% in 2025 and 5% in 2026.
The IMF notes the region has shown resilience despite global uncertainty and geopolitical tensions, but warns that higher regional tensions, weaker global demand, or tighter financial conditions could still hurt growth - especially in countries with large financing needs or banks heavily exposed to sovereign debt.
May Allah grant stability and ease for our communities. Wa alaikum assalam.
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