IMF Projects Gulf Economies Will Struggle to Recover from Ongoing Conflicts

ISLAMABAD: The International Monetary Fund (IMF) has issued a stark warning regarding the recovery trajectory of energy-rich Gulf economies, indicating that a return to pre-war growth levels is unlikely in the medium term. This assessment comes amid ongoing conflicts involving Saudi Arabia and Yemen’s Houthis, which have significantly disrupted economic activities in the region.

IMF regional director Jihad Azour stated on Thursday that the prolonged fighting has led to a widespread contraction in Gulf economies, with maritime energy traffic still facing adverse impacts. Azour emphasized that the current economic shock will leave lasting scars on various sectors and necessitate increased spending to bolster infrastructure resilience.

This warning highlights the broader implications for citizens and regional stability, as the Gulf economies grapple with the fallout from the conflicts. The IMF’s projections suggest that the economic landscape will remain challenging, affecting employment, investment, and overall economic growth in the region.

As global economic experts convene in Bangkok to address these pressing issues, including high energy costs and the sustainability of the artificial intelligence boom, the IMF’s insights will be crucial for policymakers. Future discussions are expected to focus on strategies to mitigate the impacts of ongoing conflicts and foster economic recovery in the Gulf.