War in the Middle East is deepening global inequality, IMF says

The International Monetary Fund (IMF) warns that wars in the Middle East are exacerbating global inequality, as outlined in their latest World Economic Outlook. The conflict in the Gulf, along with the war on Iran and Israel's actions in Gaza, contribute to the widening gap between economic winners and losers. Kristalina Georgieva, the IMF's managing director, predicts that approximately 40% of jobs could be impacted by artificial intelligence (AI), with poorer and developing nations bearing the brunt of instability due to limited resources.

Oil and gas exports from Bahrain, Iraq, Kuwait, and Qatar have been disrupted by the Iran conflict, leading to a projected double-digit decline in their total output this year. Saudi Arabia, more diversified economically, is expected to contract by 3.3% this year before growing by 7.9% in 2027, but recent attacks on its infrastructure may threaten its tourism sector.

Other causes of economic instability include Russia's war in Ukraine, Donald Trump's tariffs, soaring energy prices, and the "super" El Nino weather effect, which could result in 450,000 heat-related deaths. The IMF forecasts global growth at 3.1% for this year and 3.4% for 2027, but emphasizes that this growth is unevenly distributed, with low-income countries, particularly those reliant on oil imports, facing the greatest risk of income gap widening.