Gulf economies will not return to pre-war growth soon, IMF warns

The International Monetary Fund (IMF) expects Middle Eastern economies to bounce back, but not in the medium term, the organisation's regional chief said on Thursday. "We will not go back to the pre-war trajectory in the medium term because this shock will have a scarring impact on various sectors and also will disrupt a certain number of infrastructure, and will require additional spending in order to increase resilience," IMF regional director Jihad Azour told reporters. The warning comes as officials and experts huddled in Bangkok this week to discuss headwinds facing the global economy, including stubbornly high energy costs. The IMF on Tuesday released projections showing that the Middle East and Central Asia region -- directly exposed to the Iran war -- is expected to contract 0.3 percent in 2026. Saudi Arabia is among the worst affected, with its economy projected to shrink 3.3 percent, a rare recession for the kingdom long been buffered by robust energy exports. On Wednesday, IMF chief Kristalina Georgieva warned that ongoing attacks targeting Saudi Arabia could affect people "everywhere". Report by AFP