The war with Iran has delivered the deepest oil and gas shock in modern history, deeper than the crises of 1974 and both Gulf Wars. Yet its effect on prices and markets has been far milder than in previous episodes, the International Monetary Fund said.
For Jihad Azour, director of the IMF’s Middle East and Central Asia department, that resilience is the result of years of economic diversification and stronger policy frameworks across the Gulf. The IMF’s latest regional outlook forecasts a contraction this year, followed by a strong rebound in 2027.
In this interview for Business Extra, Mr Azour joins The National's Editor in Chief Mina Al-Oraibi to speak about why the war’s impact has been uneven among countries in the region.
Mr Azour also explains why the UAE, Qatar and Saudi Arabia’s investment of more than $150 billion in AI leaves them close to advanced economies in readiness. He sets out how renewed attention to geography could bring the Gulf and the Levant closer together through new trade routes to the Mediterranean.
He discusses Iran’s economy, which the IMF expects to shrink by 9 per cent amid hyperinflation and a collapsing currency. He also covers Iraq, where 80 per cent of oil exports pass through the Strait of Hormuz and 90 per cent of state revenue comes from oil.
The conversation also turns to Syria, where growth is expected to exceed double digits this year.
Mr Azour also looks at Lebanon that faces a war that has displaced a fifth of its population, on top of a financial collapse that is now seven years old. The interview has also covered Egypt, where inflation has fallen to 14 per cent from 50 per cent during the last external shock.
He reflects on whether AI is a bubble, and why the region can benefit from what he calls a transformative technology.
Business Extra is available on YouTube, Apple Podcasts, Spotify and other major platforms.
