Washington: The Middle East, North Africa, Afghanistan, and Pakistan region is experiencing significant economic challenges due to ongoing conflicts, which are affecting critical energy supply routes and infrastructure. These disruptions are contributing to market instability and a bleak economic forecast for 2026, with anticipated growth slowing to 1.8 percent, a sharp decline from the 4.0 percent growth seen in 2025.

According to The World Bank, the April 2026 Economic Update highlights the toll of these conflicts on both human and economic fronts, intensifying geopolitical uncertainty. The report notes that the growth outlook for the region, excluding Iran, is now 2.4 percentage points below earlier projections made in January. The conflicts are also causing inflationary pressures, as rising energy prices increase production costs and food prices, impacting areas beyond the immediate conflict zones.

The report, titled “Challenges of Conflict and Industrial Policy for Development,” explores how these conflicts are affecting regional economies and examines potential strategies for growth and job creation through industrial policies. As the region faces these hurdles, the report underscores the need for strategic economic planning to mitigate the adverse effects of geopolitical tensions and infrastructure disruptions.