An IMF assessment found that fiscal adjustments and protective financial policies put in place across GCC member states have built up those economies' capacity to absorb shocks stemming from US-Iran tensions and the broader instability affecting the surrounding region.
At a joint press briefing held during the IMF and World Bank Group annual meetings in Bangkok, Managing Director Kristalina Georgieva noted that Gulf nations had put in place policy reforms and financial buffers that helped absorb the effects of outside economic pressures. A session running parallel to the International Monetary and Financial Committee's proceedings took place under the chairmanship of Saudi Finance Minister Mohammed Al-Jadaan.
Policies put in place across GCC economies, Georgieva noted, had cushioned the blow from external pressures while allowing those nations to draw on revenues accumulated before the more recent difficulties took hold. The IMF's revised growth outlook for the Middle East and North Africa — trimmed by two percentage points — reflects the broader economic pressures bearing down on nations across that region.
Iraq's request for an IMF programme drew a response from Georgieva, who indicated the Fund stood ready to offer both financing and policy support. Talks with Lebanon had moved closer to a deal, she noted, though some outstanding work still lay ahead. On the Egypt side, the lending arrangement was on track for completion before the year's close, while the Fund's engagement with Jordan had drawn assessments of strong performance.
Al-Jadaan pointed out that countries throughout the Middle East and North Africa were each occupying a distinct fiscal position when the most recent round of turbulence arrived. Structural reforms and financial cushions were already in place across most GCC nations when the disruptions arrived, he noted, whereas a number of other economies had comparatively fewer tools and narrower policy space at their disposal.
Capital flows from nations including Saudi Arabia were cited as one element that helped cushion the broader global economy against the worst effects of the energy crisis. Wars and conflicts impose heavy tolls on both human lives and national economies, Al-Jadaan pointed out. Waterway and trade-route disruptions, he noted, place energy and food supplies at risk, while friction between nations alongside breaks in supply chains introduce volatility and push costs higher.
Elevated government borrowing and climbing bond yields are adding to financial fragility, Al-Jadaan noted, pointing toward the value of steady, growth-conscious economic management paired with protections for social cohesion. Plans to restore fiscal buffers over the medium term were outlined, alongside commitments to shield lower-income groups from hardship and draw in investment aimed at broadening economic activity.
Among the points he put forward were the need to keep central banks free from political interference, pursue structural economic reforms, and allow the private sector to drive investment. Stronger multilateral coordination on trade imbalances and tensions was among the positions Al-Jadaan put forward, alongside a push for debt restructuring processes to move more swiftly and in closer alignment across nations, with the G20 Common Framework named as one avenue for that work.
The committee's delegates placed weight on keeping energy supplies both secure and adaptable, protecting open maritime routes, extending relief to nations burdened by debt, and bolstering the Fund's tools for supporting its lower-income member economies. Nations caught between active conflicts and climbing energy costs found themselves at the centre of a committee push for expanded near-term financial relief.
Convening in Bangkok, the committee's chair released a statement after the gathering concluded, pointing to economic risks that continued to lean toward negative outcomes and casting a shadow over the direction of the world economy. The IMF's findings, according to the assessment, point to the value of nations keeping their economies on a stable footing where armed conflict reshapes supply chains, energy flows, and investor confidence.
Gulf Cooperation Council nations have drawn on policy adjustments and accumulated financial reserves to cushion themselves against external shocks, though the broader neighbourhood faces an unresolved mix of geopolitical tensions and economic headwinds.
