Resilient for Whom?

The IMF's October 2026 Outlook and the Poor of MENA

From Geoeconomics to Resilience

At the start of the October 2026 IMF-World Bank annual meetings in Bangkok, the IMF released the October edition of the World Economic Outlook. The fund titled this edition Resilience Under Strain, Urgent Choices.¹ The IMF’s chief economist summarized the report, noting that the global economy has been resilient, but that resilience is under strain.²

A year ago, the October 2025 edition described a world adjusting to “greater protectionism and fragmentation.”³ Tariffs, sanctions, and the use of trade as an instrument of power dominated the meetings. Last year, geoeconomics dominated the discourse; today, resilience does.

The shift deserves attention. Geoeconomics signals power. It asks who imposes costs on whom and why. Resilience denotes endurance. The difference between the two reports' themes suggests the conversation has shifted from the causes of hardship to the management of its consequences.

What Economic Resilience Means

Resilience is a term often cited but used loosely. One can also view economic resilience as an economic system's ability to keep functioning during a shock, regardless of its size. What matters about resilience is that it is measured at the system level: national output, trade, and financial stability. However, it says nothing about resilience's impact on people. A system can be resilient even when large groups within it are not. So, the economy may look resilient by assets, but not by people.

The IMF's Resilience Story: Energy and AI

According to the IMF's October 2026 World Economic Outlook, the global economy is resilient because energy markets have adapted. The closure of the Strait of Hormuz did not trigger the severe oil shock that would have pushed oil prices to historical levels. Supply was rerouted, production rose elsewhere, and inventories fell.

The second reason is the artificial intelligence (AI) investment boom, which has supported trade and capital formation and partially offset the energy shock. The IMF Managing Director argued, “We now have an economy that is standing on one leg, the AI leg.”⁴ However, the report did not highlight the high concentration of AI investment in a few countries. For example, China and the United States account for more than 75% of net imports of AI computing hardware and 57% of new data centers built since 2024, while Taiwan and South Korea supply 62% of net AI hardware exports.⁵

The problem with this positive story about the world’s economic resilience is that it is unevenly distributed. One source of resilience is energy adaptation, which protected the world economy by shifting energy supplies away from the Strait of Hormuz. But what about the countries that are energy importers? And what about economies that have no stake in AI investment?

The Middle East and North Africa at the Center of the Shock

The October edition of the World Economic Outlook identifies the Middle East as the primary downside risk to the global forecast. It warns that “a prolonged stalemate or further escalation in the Middle East” could keep energy and food prices high and volatile, reignite inflation, and weaken fiscal and external balances.⁶

For the Middle East and North Africa, the IMF projects a 2.0% contraction in 2026 and 7.0% growth in 2027. Inflation is projected at 14.9% in 2026, up from 12.8% in 2025, and to ease to 11.0% in 2027.⁷

Hydrocarbon output and export routes drive the contraction and rebound, and the recovery assumes that shipping through Hormuz will resume in 2027 and gradually normalize.⁸

Inflation near 15% is the channel through which a regional war becomes a household crisis. Poor families spend a larger share of their budgets on food and energy and hold no assets that appreciate with inflation, so inflation of this magnitude functions as a regressive tax.

Inflation is a serious concern. According to the World Bank’s September 2026 Global Poverty Update, “progress on extreme poverty remains sharply uneven. Rates are below 5% in all regions except the Middle East, North Africa, Afghanistan and Pakistan region, and remain high in Sub-Saharan Africa.”⁹ Earlier this year, the World Bank also updated its extreme poverty data for the Middle East, Afghanistan, and Pakistan region, raising the extreme poverty rate from 11.8% to 14.4%, adding about 21 million people. The World Bank argued that this is the only region where the rate has increased in recent years. These figures predate even the Iran war.¹⁰

The problem with all these descriptions is that they ignore the human factor. Using the IMF's definition, an economy is resilient if growth, price stability, and financial stability survive a shock. But what about people? Can they also survive a shock? This is the fundamental issue. Rich people usually have buffers and resources to weather a shock. They have flexibility, for example, by postponing payments. But the poor lack this flexibility. If recovery is concentrated in capital-intensive exports, the impact and losses are concentrated in households without buffers.

Lebanon offers an illustrative example. After the 2019 financial collapse, Lebanese society was widely praised for its resilience. In practice, much of that resilience meant households absorbed losses through emigration, remittances, and depleted savings, with little state support. In this case, resilience means shifting risk from institutions to families.

Toward a People-Centered Resilience

The IMF measures resilience in physical terms: rerouted barrels of oil, drawn-down inventories, built data centers, and output that dips and recovers. By that measure, the world economy passed the 2026 test. But a measure of resilience that doesn't ask what happened to people leaves out the most important question.

The world survived higher oil prices, but people are paying for them. The global economy absorbed the shock with modest growth losses, but households felt it through higher prices for gasoline, cooking gas, bread, and transportation. For a family in Cairo, Amman, or Beirut, global growth holding up offers no comfort when the monthly budget no longer covers essentials. An economy that keeps its output while its people become poorer and more exposed is not resilient. Calling it resilient is misleading. It is a facade that obscures where the cost of the shock actually landed.

How many people bear that cost depends on the state. The same shock produces very different outcomes depending on how the state responds. When the state protects the poor, keeps essential services running, and spreads the burden fairly, it limits household damage and helps recovery reach them. When people are left to their fate, the shock hits household budgets directly, and the damage lasts long after the indicator numbers improve. Lebanon showed this after 2019. The resilience praised was that of families left on their own, and the country became more vulnerable to every subsequent shock.

This is why resilience depends more on state strength and governance than on energy markets or AI investment. A state that collects revenue fairly, delivers health care, education, and social protection, and is accountable to its citizens gives people a buffer no rerouting of oil supplies can provide. A weak or captured state turns every external shock into a domestic crisis. In MENA, where extreme poverty was rising before the war, the difference between these two kinds of states will determine who comes out of 2026 poorer.

The IMF titled its report “Resilience Under Strain: Urgent Choices.” The real strain is on people, and the urgent choice concerns governance. Without states that protect their citizens, an economy may still recover even as its people do not. That is not resilience.

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