CONFLICT HITS MENAAP ECONOMIES

The latest conflict in the Middle East has inflicted a serious economic toll on Middle East, North Africa, Afghanistan, and Pakistan countries. Closure of the Strait of Hormuz and destruction of energy and public infrastructure have disrupted markets, heightened financial volatility, and dimmed the 2026 growth outlook. This shock exacerbates the region's pre-existing issues of low productivity growth, limited private sector dynamism, and persistent labor market challenges. The World Bank stresses the urgent need to strengthen governance, macroeconomic fundamentals, and initiatives for long-term job creation and resilience.