The International Monetary Fund (IMF) has significantly downgraded its growth forecasts for the Middle East and North Africa region on Tuesday, following the war between Iran and the United States and Israel that spread to the Gulf.
In its latest report on the global economy, the institution anticipates a growth of 1.1% in 2026, down from 3.2% in 2025, with the region experiencing “the most direct impact of the conflict”.
The IMF had previously estimated a +3.9% growth in its January publication.
After the Israeli-American offensive against Iran launched on February 28, Tehran retaliated by targeting American bases in the Gulf as well as infrastructure – oil refineries, gas complexes, and petrochemical plants.
The blockade of the Strait of Hormuz, a vital maritime route for oil exports, also deprives the region’s monarchies of essential revenues.
The expected slowdown in these countries varies “depending on the extent of the damage to energy and transport infrastructure, as well as the dependence on the Strait of Hormuz and the availability of alternative export routes,” the IMF emphasizes.
The impact is expected to be “more pronounced for Bahrain, Iran, Iraq, Kuwait, and Qatar, and less significant for Oman, Saudi Arabia, and the United Arab Emirates,” it adds.
Iran, which has endured weeks of intensive bombings, is expected to see its gross domestic product (GDP) contract by 6.1% this year (compared to a previous growth estimate of 1.1%), while in Qatar, where the primary site for liquefied natural gas production was heavily damaged, economic activity is expected to plummet by 8.6% in 2026.
Iraq’s GDP is projected to decline by 6.8% this year.
Saudi Arabia, the world’s largest oil exporter, is more resilient thanks to its access to the Red Sea, allowing it to bypass the Strait of Hormuz. The growth of the region’s largest economy is expected to be at 3.1% in 2026, down from the previously anticipated +4.5%.
After this dark year, a rebound is expected in the entire region in 2027, “assuming that energy production and transport normalize in the coming months,” the IMF estimates, as a ceasefire came into effect on April 8.
However, this optimistic scenario could be revised “if the conflict continues and the extent of the damage is reassessed,” it warns.
Importing countries in the region are indirectly affected, particularly by the increase in energy prices and other commodities, according to the organization based in Washington. In Egypt, growth is expected to be at 4.2% in 2026 (instead of the previously anticipated +4.7%).
[Context: The IMF has revised down growth forecasts for the Middle East and North Africa region due to the impact of the conflict between Iran, the United States, and Israel.]
[Fact Check: The article mentions a conflict involving Iran, the United States, and Israel, and the impact on the region’s economy.]
