The ongoing Middle East conflict is likely to create significant economic slowdown and heighten risks across the Middle East, North Africa, Afghanistan and Pakistan (MENAP) region, International Monetary Fund (IMF) Resident Representative in Pakistan Mahir Binici has said.
Addressing an outreach session at Islamabad’s Sustainable Development Policy Institute (SDPI), he presented the IMF’s April 2026 Regional Economic Outlook Update for the MENAP region. He noted that the outbreak of the war on Feb. 28 triggered a severe and multifaceted shock, disrupting energy markets, trade routes and financial conditions, particularly around the Strait of Hormuz.
These developments, he said, have also affected global logistics, as well as food and fertilizer prices, leading to a sharp slowdown in regional growth with downside risks. For oil-importing economic like Pakistan, he stressed, the conflict has compounded existing vulnerabilities through higher energy and food import costs, potential decline in remittances from Gulf-based workers and tighter financial conditions.
Binici noted that rather than giving broad-based subsidies, Pakistan must protect vulnerable segments through targeted and temporary support measures while working to achieve macroeconomic stability and rebuild fiscal and external buffers. He appreciated Pakistan’s performance under the IMF’s Extended Fund Facility program, noting it remained broadly on track. Pakistan’s policy priorities, he said, included maintaining a prudent fiscal stance, ensuring a tight and data-driven monetary policy and advancing structural reforms.
Over the medium-term, said the IMF official, Islamabad must strengthen economic resilience through diversified trade routes, investment in critical infrastructure, enhanced regional cooperation and reforms to promote private sector-led inclusive growth. Continued implementation of ongoing reforms, he stressed, is crucial for Pakistan to maintain stability and navigate an increasingly volatile regional and global environment.
SDPI Executive Director Abid Qaiyum Suleri welcomed the IMF Country Resident Representative upon arrival saying the discussion aimed to assess evolving regional and global dynamics and their implications for Pakistan’s economy. He noted Pakistan remained vulnerable to regional and global shocks due to limited preparedness and called for policy focus on energy sector reforms, including negotiations on capacity payments and greater reliance on renewable sources.