The International Monetary Fund (IMF) has said economic reforms and precautionary measures adopted by Gulf Cooperation Council (GCC) countries have strengthened their ability to withstand the economic repercussions of the US-Iran war and the wider regional turmoil.
Speaking at a joint press briefing during the annual meetings of the IMF and World Bank Group in Bangkok, IMF Managing Director Kristalina Georgieva praised Gulf countries for undertaking reforms and building financial safeguards that helped cushion the impact of external shocks.
The briefing was held alongside the work of the International Monetary and Financial Committee, chaired by Saudi Finance Minister Mohammed Al-Jadaan. Georgieva said the measures adopted by GCC economies had helped them mitigate the shock and benefit from revenues generated before the latest challenges.
However, the IMF has lowered its growth forecasts for the Middle East and North Africa region by two percentage points, reflecting the growing economic risks facing the region. Georgieva said Iraq had requested an IMF programme and that the Fund was prepared to provide financing and policy support.
She added that discussions with Lebanon had made significant progress towards an agreement, although further work remained. Egypt’s programme was progressing and was expected to be completed by the end of the year, while she described the IMF programme with Jordan as successful.
Al-Jadaan said countries across the Middle East and North Africa entered the current period of economic disruption from different starting points. Most GCC countries, he said, had undertaken structural reforms and built protective financial buffers, while other economies faced the shocks with more limited resources and room to manoeuvre.
He also pointed to investments by countries such as Saudi Arabia as a factor that helped mitigate the impact of the energy crisis on the global economy. Al-Jadaan warned that wars and conflicts carry severe human costs and significant economic consequences. Disruptions to waterways and trade routes, he said, threaten energy and food security, while geopolitical tensions and supply-chain interruptions add uncertainty and put upward pressure on prices.
Rising public debt and bond yields are also increasing financial vulnerabilities, reinforcing the need for countries to maintain prudent economic policies while protecting growth and social stability. He called for medium-term plans to rebuild financial buffers while protecting vulnerable groups and encouraging investment that supports economic growth. He also stressed the importance of central bank independence, structural reforms and private-sector-led investment.
Al-Jadaan urged greater international cooperation to address trade imbalances and tensions, as well as faster and better-coordinated debt restructuring, including through the G20 Common Framework. Members of the International Monetary and Financial Committee also stressed the importance of maintaining safe and flexible energy flows, upholding freedom of navigation, supporting countries facing debt vulnerabilities and strengthening the IMF’s capacity to assist low-income economies.
The committee called for increased support for countries facing short-term financing pressures arising from the effects of conflicts and higher energy prices. In a statement issued by its chairman following the meeting in Bangkok, the committee warned that economic risks remained tilted to the downside, underscoring the uncertain outlook facing the global economy.
The IMF’s assessment highlights the importance of economic preparedness as regional conflicts affect energy markets, trade routes and investor confidence. For GCC countries, reforms and financial buffers have provided a measure of protection, while the wider regional outlook remains exposed to continued geopolitical and economic pressures.