DUBAI: The International Monetary Fund Tuesday slashed its economic growth forecast for the Middle East and North Africa to the worst level in more than a decade over Iran sanctions and regional unrest.
In its World Economic Outlook update, the global lender projected economic growth for the Middle East, North Africa, Afghanistan and Pakistan this year would be 1.0 percent, its worst since the IMF put them in one group in 2009.
The downgrade, the fifth in a year, is a half percentage point lower than its April projection.
The reduction is in large part due to a change in the IMF’s forecast for Iran’s growth “owing to the crippling effect of tighter US sanctions,” the lender said.
“Civil strife across other economies, including Syria and Yemen, add to the difficult outlook for the region.”
The price of oil, the main driver for revenues in the region, will also impact growth, the IMF added.
In 2018, the region saw 1.6 percent growth, down from 2.1 percent in the previous year.
The IMF in April projected Iran’s economy will shrink by a steep 6.0 percent this year, its worst performance since it contracted by 7.7 percent in 2012.
The new report provided no updated figures on the Iranian economy, the second largest in the region behind Saudi Arabia, but other reports predicted a deeper recession in the Islamic republic.
One report jointly prepared by the London-based Institute of Chartered Accountants in England and Wales and Oxford Economics, released early this week, said Iran’s economy is expected to shrink by 7.0 percent this year.
The report also predicted regional growth to be just 0.6 percent due to Iran sanctions and instability in the region.
US sanctions on Iranian oil exports were renewed in May and aim to halt Tehran’s overseas crude sales, which provide key revenues to the Islamic republic.
The IMF also attributed the lower growth projections to rising US-Iran tensions centered on recent incidents in the Gulf and unrest in several Arab nations.
“Civil strife in many countries raises the risks of horrific humanitarian costs, migration strains in neighboring countries, and, together with geopolitical tensions, higher volatility in commodity markets,” the IMF said.
The IMF raised its forecasts for Saudi economic growth this year by 0.1 percentage points, to 1.9 percent, and to 3.0 percent in 2020.
It attributed the boost to the development of the kingdom’s non-oil-related sectors.
The world’s largest oil exporter has substantially cut power and fuel subsidies as well as imposed fees on expatriates and a five-percent value added tax as part of a reform program to decrease dependence on oil.
IMF slashes Mideast growth projections over Iran sanctions
IMF slashes Mideast growth projections over Iran sanctions
- The IMF projected economic growth for the Middle East, North Africa, Afghanistan and Pakistan this year would be 1.0 percent
First EU–Saudi roundtable on critical raw materials reflects shared policy commitment
RIYADH: The EU–Saudi Arabia Business and Investment Dialogue on Advancing Critical Raw Materials Value Chains, held in Riyadh as part of the Future Minerals Forum, brought together senior policymakers, industry leaders, and investors to advance strategic cooperation across critical raw materials value chains.
Organized under a Team Europe approach by the EU–GCC Cooperation on Green Transition Project, in coordination with the EU Delegation to Saudi Arabia, the European Chamber of Commerce in the Kingdom and in close cooperation with FMF, the dialogue provided a high-level platform to explore European actions under the EU Critical Raw Materials Act and ResourceEU alongside the Kingdom’s aspirations for minerals, industrial, and investment priorities.
This is in line with Saudi Vision 2030 and broader regional ambitions across the GCC, MENA, and Africa.
ResourceEU is the EU’s new strategic action plan, launched in late 2025, to secure a reliable supply of critical raw materials like lithium, rare earths, and cobalt, reducing dependency on single suppliers, such as China, by boosting domestic extraction, processing, recycling, stockpiling, and strategic partnerships with resource-rich nations.
The first ever EU–Saudi roundtable on critical raw materials was opened by the bloc’s Ambassador to the Kingdom, Christophe Farnaud, together with Saudi Deputy Minister for Mining Development Turki Al-Babtain, turning policy alignment into concrete cooperation.
Farnaud underlined the central role of international cooperation in the implementation of the EU’s critical raw materials policy framework.
“As the European Union advances the implementation of its Critical Raw Materials policy, international cooperation is indispensable to building secure, diversified, and sustainable value chains. Saudi Arabia is a key partner in this effort. This dialogue reflects our shared commitment to translate policy alignment into concrete business and investment cooperation that supports the green and digital transitions,” said the ambassador.
Discussions focused on strengthening resilient, diversified, and responsible CRM supply chains that are essential to the green and digital transitions.
Participants explored concrete opportunities for EU–Saudi cooperation across the full value chain, including exploration, mining, and processing and refining, as well as recycling, downstream manufacturing, and the mobilization of private investment and sustainable finance, underpinned by high environmental, social, and governance standards.
From the Saudi side, the dialogue was framed as a key contribution to the Kingdom’s industrial transformation and long-term economic diversification agenda under Vision 2030, with a strong focus on responsible resource development and global market integration.
“Developing globally competitive mineral hubs and sustainable value chains is a central pillar of Saudi Vision 2030 and the Kingdom’s industrial transformation. Our engagement with the European Union through this dialogue to strengthen upstream and downstream integration, attract high-quality investment, and advance responsible mining and processing. Enhanced cooperation with the EU, capitalizing on the demand dynamics of the EU Critical Raw Materials Act, will be key to delivering long-term value for both sides,” said Al-Babtain.
Valere Moutarlier, deputy director-general for European industry decarbonization, and directorate-general for the internal market, industry, entrepreneurship and SMEs at European Commission, said the EU Critical Raw Materials Act and ResourceEU provided a clear framework to strengthen Europe’s resilience while deepening its cooperation with international partners.
“Cooperation with Saudi Arabia is essential to advancing secure, sustainable, and diversified critical raw materials value chains. Dialogues such as this play a key role in translating policy ambitions into concrete industrial and investment cooperation,” she added.
