The International Monetary Fund (IMF) said Thursday that economic output across the Middle East, North Africa, Afghanistan and Pakistan is projected to contract 1.3 percent in 2026, citing the impact of the U.S.-Israeli conflict with Iran on energy production, shipping, trade and tourism.
The IMF released its Regional Economic Outlook report in Dubai, the United Arab Emirates on Thursday. The forecast marks a downward revision of about three percentage points from the fund's April projection.
Among the Gulf Cooperation Council member states, all except Oman are expected to see their economies shrink this year, according to the IMF. Bahrain, Kuwait and Qatar are projected to post double-digit declines in economic output.
The IMF noted that if the conflict eases in early 2027 and regional trade gradually returns to normal, the economies of the Middle East and North Africa, Afghanistan and Pakistan could rebound in 2027. However, it cautioned that the regional economic outlook remains highly uncertain.
Mideast, North Africa, Afghanistan, Pakistan output to shrink 1.3 pct in 2026: IMF
The U.S. and Israeli militaries have drawn up concrete plans to launch another military strike on Iran after the U.S. midterm elections, The New York Times reported Wednesday, citing U.S. officials and other informed sources.
However, it remains uncertain how effective the reported new round of strikes would be and whether U.S. President Donald Trump will approve the plan.
The report said the United States and Israel are planning a short but intense operation, with possible targets including Iran's energy infrastructure, nuclear facilities, and missile and drone stockpiles. The two sides have also stepped up joint drills, including simulated strikes by military aircraft flying over Iraq.
Also on Wednesday, CBS News, citing government officials and military sources, reported that the U.S. military is "quietly" scaling back its troop presence at bases across the Middle East due to the ongoing regional threat posed by Yemen's Houthi group and the direct threat from Iran. NBC News reported Thursday that the U.S. military is cutting troop levels in Jordan, Qatar and Kuwait.
The U.S. Central Command (CENTCOM) declined to comment on the reports.
U.S. State Department spokesman Tommy Pigott said Wednesday in a social media post that the department had ordered the departure of "non-emergency" government employees and their families from the U.S. Embassy in Saudi Arabia.
The NBC News report said that the military drawdown and the ordered departures are similar to the U.S. moves to scale back its military presence and embassy staff before launching military strikes on Iran in late February this year.
Separately, Israeli and U.S. media reported Wednesday that from Monday night to early Tuesday, dozens of Israeli fighter jets and aerial refueling aircraft took off from the Nevatim Air Base in southern Israel, crossed Syrian and Iraqi airspace and approached the Iranian border.
According to the reports, the Israeli warplanes turned back just before entering Iranian airspace, following a route highly similar to an attack path against Iran. The reports cited relevant sources as saying that some Israeli officials were in fact trying to provoke Iran into firing on the jets, creating a pretext for an Israeli strike.
The Times of Israel reported Wednesday that Israeli Prime Minister Benjamin Netanyahu said earlier that day that only toppling the Iranian regime could eliminate the so-called Iranian threat to Israel. He also said that he had ordered the Israel Defense Forces (IDF), Mossad and the Military Intelligence Directorate to "topple the Iranian regime".
Iran's Foreign Minister Seyed Abbas Araghchi said Wednesday on social media that if the United States chooses war over diplomacy, it will surely suffer a greater strategic failure. He said Iran would give diplomacy another chance if there is sufficient evidence that Washington is willing to sincerely build mutual trust and reach a just solution.
US, Israel plan strike on Iran after midterm elections: media
