IMF Revises MENA GDP Growth Forecast to 3.3% Amid Global Uncertainties

The International Monetary Fund (IMF) has revised its 2025 GDP growth forecast for the Middle East and North Africa (MENA) region, increasing it from 2.6% to 3.3%. This adjustment, detailed in the IMF's October 2025 Regional Economic Outlook, highlights the region's economic resilience amid global uncertainties such as trade tensions and inflationary pressures.

The IMF attributes this positive revision to several factors. Oil-exporting countries in the MENA region have benefited from increased oil production, substantial public investment, and ongoing diversification efforts. These elements have collectively bolstered economic performance in nations heavily reliant on oil revenues.

Conversely, oil-importing countries have experienced economic growth driven by lower commodity prices, a rebound in tourism, and stronger remittance inflows. These factors have enhanced household incomes and stimulated domestic consumption, contributing to the overall economic upturn in the region.

Egypt stands out within the MENA region, with the IMF raising its 2025 growth forecast to 3.8% and projecting a further increase to 4.3% in the following year. This improvement is largely attributed to a robust recovery in the tourism sector and significant remittance inflows from Egyptians working abroad. Additionally, Egypt has made notable progress in reducing inflation, aided by an $8 billion IMF bailout in 2024. The IMF emphasizes the importance of Egypt continuing its divestment and reform initiatives, particularly concerning state-owned enterprises, to sustain this positive trajectory.

Despite the optimistic outlook, the IMF cautions that several risks could adversely affect the region's economic performance. Potential declines in global oil prices pose a significant threat to oil-exporting economies, potentially impacting revenues and fiscal balances. Escalating global trade tensions, especially between major economies like the United States and China, could disrupt international trade flows, affecting MENA economies dependent on global trade. Furthermore, persistent global inflationary pressures may lead to tighter monetary policies worldwide, resulting in higher borrowing costs and reduced capital inflows for MENA countries.

Since 2020, the IMF has approved $55.7 billion in financing for the MENA region, with $21.4 billion allocated since early 2024 to countries including Egypt, Jordan, Morocco, and Pakistan. This financial support underscores the IMF's commitment to stabilizing and fostering growth in the region amid ongoing challenges.

The revised growth forecast and associated developments have several implications. The upward revision reflects the region's ability to adapt and grow despite global economic headwinds, highlighting the effectiveness of diversification and reform strategies. The IMF's emphasis on continued reforms, particularly in state-owned enterprises, suggests a need for sustained policy efforts to ensure long-term economic stability and growth. Economic growth can also contribute to social stability by reducing unemployment and improving living standards, which is particularly crucial in a region often affected by geopolitical tensions.

The MENA region has faced various economic challenges over the years, including fluctuating oil prices, political instability, and global financial crises. The current growth forecast revision indicates a positive shift compared to previous years, suggesting that recent policy measures and global economic conditions have been more favorable.

In conclusion, the IMF's revised growth forecast for the MENA region underscores the area's resilience amid global uncertainties. While the outlook is positive, the IMF cautions that risks remain, necessitating continued vigilance and reform efforts to sustain and build upon this growth trajectory.