IMF forecasts MENA contraction in 2026 before sharp rebound
The Middle East and North Africa region's economy is projected to contract by 0.3% in 2026 before rebounding 6.3% in 2027, the International Monetary Fund said, as the prolonged closure of the Strait of Hormuz weighs heavily on energy producers across the Gulf.
The forecasts, published in the IMF's latest World Economic Outlook on Tuesday, represent a downward revision of 2.2 percentage points for 2026 and an upward revision of 1.7 percentage points for 2027 compared with the Fund's April projections. The IMF said the revisions reflect a longer-than-anticipated Hormuz closure and a correspondingly larger recovery once shipping routes normalise.
"Bahrain, Iraq, Kuwait and Qatar — commodity producers most affected by disruptions to energy output and transport — are projected to experience double-digit contractions of their economies in 2026, followed by double-digit expansions in 2027 as production, exports and logistics normalise," the IMF said.
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Muhammad Ali Bandial