Public Disclosure Authorized Public Disclosure Authorized Middle East, North Africa,Afghanistan & PakistanEconomic Update The Office of theChief Economist ofthe Middle East,North Africa,Afghanistan &Pakistan Region APRIL 2026 Middle East, North Africa,Afghanistan & PakistanEconomic Update Challenges of Conflict andIndustrial Policy for Development © 2026 International Bank for Reconstruction and Development / The World Bank1818 H Street NW, Washington, DC 20433Telephone: 202-473-1000; Internet: www.worldbank.org Some rights reserved1 2 3 4 29 28 27 26 This work is a product of the staff of The World Bank with external contributions. The findings, interpretations, and conclusionsexpressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governmentsthey represent. The World Bank does not guarantee the accuracy, completeness, or currency of the data included in this work anddoes not assume responsibility for any errors, omissions, or discrepancies in the information, or liability with respect to the use of orfailure to use the information, methods, processes, or conclusions set forth. The boundaries, colors, denominations, links/footnotesand other information shown in this work do not imply any judgment on the part of The World Bank concerning the legal statusof any territory or the endorsement or acceptance of such boundaries. The citation of works authored by others does not mean theWorld Bank endorses the views expressed by those authors or the content of their works. Certain artificial intelligence (“AI”) toolsmay have been used in creating this work, as indicated in the work, but all transformative and creative effort expressed in the workwas performed by the World Bank staff or external contributors. The World Bank is not responsible for any claims, including forerrors or inaccurate information, generated by AI programs not controlled or owned by the World Bank. Nothing herein shall constitute or be construed or considered to be a limitation upon or waiver of the privileges and immunities ofThe World Bank, all of which are specifically reserved. Rights and Permissions This work is available under the Creative Commons Attribution 3.0 IGO license (CC BY 3.0 IGO), http://creativecommons.org/licenses/by/3.0/igo. Under the Creative Commons Attribution license, you are free to copy, distribute, transmit, and adapt this work,including for commercial purposes, under the following conditions: Attribution—Please cite the work as follows: World Bank. 2026.Challenges of Conflict and Industrial Policy for Development. MiddleEast, North Africa, Afghanistan & Pakistan Economic Update (April 2026). World Bank. doi: 10.1596/978-1-4648-2328-2.License: Creative Commons Attribution CC BY 3.0 IGO. Translations—If you create a translation of this work, please add the following disclaimer along with the attribution:This translationwas not created by The World Bank and should not be considered an official World Bank translation. The World Bank shall not be liablefor any content or error in this translation. Adaptations—If you create an adaptation of this work, please add the following disclaimer along with the attribution:This is anadaptation of an original work by The World Bank. Views and opinions expressed in the adaptation are the sole responsibility of the authoror authors of the adaptation and are not endorsed by The World Bank. Third-party content—The World Bank does not necessarily own each component of the content contained within the work. TheWorld Bank, therefore, does not warrant that the use of any third-party-owned individual component or part contained in the workwill not infringe on the rights of those third parties. The risk of claims resulting from such infringement rests solely with you. If youwish to re-use a component of the work, it is your responsibility to determine whether permission is needed for that re-use and toobtain permission from the copyright owner. Examples of components can include, but are not limited to, tables, figures, or images. All queries on rights and licenses should be addressed to World Bank Publications, The World Bank, 1818 H Street NW, Washington,DC 20433, USA; e-mail: pubrights@worldbank.org. ISBN (electronic): 978-1-4648-2328-2DOI: 10.1596/978-1-4648-2328-2 AI Disclosure Statement:mAI Claude Sonnet 4.6, World Bank Group, was used in February 2026 to generate figure 2.1, and inMarch 2026 for editing purposes. All content underwent thorough human review. Cover design: Design and Creative Services, Global Corporate Solutions, World Bank Group. Contents Acknowledgments .............................................................................................................................. ixExecutive Summary............................................................................................................................ xiAbbreviations ..................................................