Middle East economy to shrink 2.1% in 2026, Gulf economies by 4.3%, World Bank forecasts
Despite grim forecasts, the World Bank projects regional economies could rebound by 7.8% in 2027 if the conflict ends this year, though the Hormuz blockade and inflation remain major threats.
The World Bank has forecast that the Middle East, North Africa, Afghanistan, and Pakistan region will experience a contraction of 2.1% in 2026, with Gulf Cooperation Council states expected to contract by an average of 4.3%. Qatar and Kuwait are anticipated to be the hardest-hit GCC economies, with GDP projected to decline by 20.9% and 14.6% respectively, while the United Arab Emirates and Saudi Arabia are expected to be the least affected, with GDP growth forecast to contract by 1.6% and 2.0% respectively.
The disruption caused by the conflict has led to significant declines in oil production and increased inflation in the region, with Qatar's food inflation exceeding 12% year-on-year and Bahrain and Oman experiencing food inflation surpassing 7%.
Brief written by urgent.news from Jerusalem Post's own syndicated text. Machine-written — may contain errors; check the original before relying on it.
