Samar El-Sayed _ A recent report issued by the International Monetary Fund expected inflation rates in the Middle East, North Africa, Afghanistan, and Pakistan region to rise during the current year 2026 to 13.8%, compared to 11.7% in 2025, before declining next year to 10.8% and reaching 6.2% in 2031.
Rising Food Prices and Freight Costs Contributed to Worsening Inflation in 2026
According to the Regional Economic Outlook Update report for the Middle East and Central Asia released by the Fund today, inflationary pressures across the region intensified overall during 2026, as higher food prices and maritime freight costs exacerbated inflation.
The report stated that the economies of the Gulf Cooperation Council (GCC) countries will witness an increase in average inflation from 0.9% in 2025 to 2.7% in 2026, declining to 2.4% in 2027, affected by higher food, energy, and transportation costs. These levels are slightly higher than the Fund's April estimates.
Gulf Region Inflation to Return to 2% Level Starting 2028
The Fund added that inflation in the Gulf region will return to the 2% level starting from 2028, supported by falling primary commodity prices, exchange rate stability, as well as continued fiscal discipline.
It pointed out that the inflation rate in Iran is trending downward from its very high levels due to the base year effect, while remaining high and persistent in Iraq.
Most Oil-Importing Countries Will Experience Accelerated Inflation in 2026
The report continued that most oil-importing countries will experience an acceleration in inflation during 2026, but at a pace lower than the Fund's projections issued last April.
It noted that the annual inflation rate in Egypt and Pakistan rose to 14.5% and 11.1%, respectively, last August, as a result of increased food and energy prices, in addition to the depreciation of the exchange rate of the Pound against the Dollar, impacted by regional tensions.
Meanwhile, Lebanon continued to record the highest inflation rate among this group of countries, reaching approximately 17%.
Inflation in the Region's Oil-Importing Countries Will Begin to Decline Starting 2027
The IMF report indicated that the inflation rate in the oil-importing countries of the region will begin to decline starting from 2027, but at a slower pace than the projections issued in April 2026.
Regarding the inflation rate in low-income countries in the region, the report mentioned that the outlook remains highly divergent; its forecasts for 2026 were revised upward for both Mauritania and Djibouti, whereas Sudan is expected to record a faster rate of decline than even that estimated last April.
