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The international community should work to end the conflict in the Middle East and address the “huge” humanitarian crisis that has engulfed countries in the region, the head of the IMF’s Middle East and Central Asia department says.
In updated economic estimates, the IMF slightly downgraded its outlook for economic growth in the Middle East and north Africa to 2.1 percent this year, while maintaining its 4.0 percent growth outlook for 2025.
However, these estimates do not take into account the economic impact of the recent escalation of conflict in southern Lebanon, where Israel has invaded to fight Hezbollah.
Jihad Azour, a former Lebanese finance minister, noted that the most severely affected places, including Lebanon and the Palestinian territories, were facing a “huge humanitarian problem” which has devastated their economies.
“You have massive loss in output, you have a massive destruction in infrastructure, and you have a huge set of needs for additional spending, for shelter, for health and so on,” he told AFP.
“We expect that growth will be negative in those cases, and we expect that the recovery would take longer to materialize,” he added.
The IMF has suspended its forecasts for the Lebanese economy, citing an “unusually high degree of uncertainty.” But a recent UN Development report estimated that the country’s GDP would be 9.2% smaller as a “direct consequence” of the conflict.
“You have massive destruction of infrastructure in a large region, which is the south, and mass destruction of livelihood, because this is an agricultural region that was severely affected,” Azour said, adding that almost 20% of Lebanon’s population had been displaced.
