World Bank forecasts boosted growth for MENA region

The World Bank has revised its 2025 growth forecast for the Middle East, North Africa, Afghanistan and Pakistan (MENAAP), but has indicated that ongoing conflicts and reduced oil production in Iran and Libya shrink the region’s long-term plans, as reported by Reuters on October 7th.   

The World Bank anticipates countries from the MENAAP region will see an average of 2.8% growth in GDP this year, improving from its April forecast of 2.6%.

This growth is reflected by stronger economic activity in the Gulf nations, including a quicker than expected rollback of oil production cuts and significant non-oil sector development, resulting in the lifted forecast. 

The World Bank stated: “The outlook has also improved in oil-importing countries, driven by private consumption and investment, and a rebound in agriculture and tourism.”

The World Bank noted that developing oil exporters are expected to go through a major deceleration due to conflict-related disruptions and reduced oil output. 

The World Bank had previously predicted that Iran’s economy would see a growth of 0.7% in 2026. However, it now expects it to shrink by 1.7% this year and decline by a further 2.8% in 2026. On June 2025, the World Bank declared that it had approved over $1 billion to fund restoration and infrastructure initiatives in Iraq, Lebanon and Syria. 

The World Bank said Iran’s economic downtrend reflects “a contraction in both oil exports and non-oil activity amid tighter sanctions, including the reimposition of UN sanctions, and disruption following the conflict in June.” On September 29th, the European Union confirmed that it had reintroduced sanctions on Iran.   

The EU’s announcement was followed by the United Nations reviving an arms embargo and additional sanctions on Iran over its nuclear programme on September 28th. These latest updates followed Israeli and U.S. strikes on Iranian nuclear sites earlier this year. 

Across the region, ongoing conflicts in Syria, Yemen, Lebanon, the West Bank and Gaza, have intensified humanitarian crises, displaced millions, and triggered major economic depressions.

The World Bank report clarified that neighbouring countries will also face the impact of the conflict through disrupted trade, refugee inflows, and rising insecurity.

Reuters, Maghrebi.org