IMF Regional Economic Outlook 2025: Middle East and Central Asia Growing at 3.3% in 2025 as Structural Reform Needs Mount
SDG 8: Decent Work and Economic Growth | SDG 17: Partnerships for the Goals
Institutions: Ministry of Finance | Ministry of External Affairs
The International Monetary Fund (IMF) released its Regional Economic Outlook for the Middle East and Central Asia (MECA) for October 2025, noting that the MENAP (Middle East, North Africa, Afghanistan, and Pakistan) region has shown resilience despite elevated global uncertainty. Regional GDP growth is projected to strengthen to 3.3% in 2025 (up from 2.1% in 2024), and is forecasted to reach 3.7% in 2026.
Growth is being driven by divergent trends. Oil exporters are benefiting from the phasing-out of voluntary oil production cuts and robust non-oil economic activity. Crucially, oil-importing countries in the region are profiting from strong tourism, low energy prices, and robust remittance inflows. The IMF emphasized that this momentum offers a narrow window for policymakers to act while conditions are stable. The IMF’s key recommendation is to accelerate structural reforms to diversify economies, empower the private sector, and attract investment that creates jobs.
The sustained strength in regional remittances provides a crucial anchor for India’s balance of payments and foreign exchange reserves, but the IMF’s core recommendation for accelerated structural reform in these nations signals that India’s investment and trade engagement should prioritize long-term, diversified partnerships.
What are Remittance Inflows?→ Remittance Inflows are funds transferred by expatriate workers (such as the large Indian diaspora in the Gulf) back to their home country. For oil-importing countries in the MENAP region, strong remittance inflows from their citizens working abroad provide critical financial support, bolstering private consumption and strengthening the balance of payments.
Follow the full update here: https://www.imf.org/en/Publications/REO/MECA/Issues/2025/10/21/regional-economic-outlook-middle-east-central-asia-october-2025