MENA Countries to Face US Tariff Backlash: IMF

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Tariff plans by the U.S. and other countries and geopolitical tensions have also created mounting global uncertainty. This will weigh down on the region’s economies, negatively impact their growth by anywhere from 2% to 4.5%, explains Jihad Azour, who is the director for Middle East and Central Asia at the IMF.

The International Monetary Fund (IMF) says countries across the Middle East and North Africa will face significant challenges to economic growth due to tariff measures. In its outlook report for the MENA region, the United Nations financial agency says Brent crude oil prices, down from highs above USD 120 a barrel in 2022, are likely to be USD 65 to USD 69 per barrel in 2025 and 2026. This will make energy-exporting economies vulnerable to market fluctuations, it adds.

Tariff plans by the U.S. and other countries and geopolitical tensions also have created mounting global uncertainty. This will weigh down on the region’s economies, negatively impact their growth by anywhere from 2% to 4.5%, explains Jihad Azour, who is the director for Middle East and Central Asia at the IMF.

Reductions in foreign aid coming into the region will also play a role, especially after U.S. President Donald Trump pulled his country back from its position as the world’s single largest aid donor. Although growth in the MENA region is expected to be 2.6% this year, as compared to 1.8% last year, he adds that the global economic uncertainty could impact the outlook. Despite the global economic uncertainty, MENA nations can drive growth through structural reforms and diversifying economic ties, the IMF report says.

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 Economies in the Persian Gulf continue to attract substantial foreign direct investment, rising by nearly 2% of GDP since the pandemic, while other MENA nations struggle with slower inflows. The IMF says it is willing to work with some of the struggling nations and the new government in Syria.