IMF Forecasts Middle East Growth to Plunge to 1.9% in 2026 Amid Iran War

Gate News message, April 15 — The International Monetary Fund (IMF) said Middle Eastern economies will experience a sharp decline in growth this year due to the Iran war, with regional GDP growth falling from 3.6% in 2025 to 1.9% in 2026, before rebounding to 4.6% in 2027.

Gulf oil and gas exporters face a “severe downward revision” in growth projections, with the impact most pronounced for Bahrain, Iran, Iraq, Kuwait, and Qatar, and less significant for Oman, Saudi Arabia, and the United Arab Emirates. Saudi Arabia’s growth forecast for 2026 was downgraded to 3.1%, down 1.4 percentage points from January’s estimate. Egypt’s growth is expected to fall to 4.2% this year, rebounding to 4.8% in 2027.

More than 80 oil and gas fields, refineries, terminals, and other energy infrastructure across the region have sustained damage, with one-third classified as “severely and very severely damaged,” according to Fatih Birol, executive director of the International Energy Agency (IEA). Birol called the war-induced energy shock the “greatest energy security threat” in history, with recovery potentially taking up to two years. Oil prices are forecast to jump 21.4% this year, while natural gas prices face greater pressure due to production restart complexity.

The energy shock is pushing global inflation to 4.4% in 2026 and 3.7% in 2027, marking a sharp deviation from recent disinflation trends. The IMF warned that prolonged Strait of Hormuz closure and further infrastructure damage would disrupt the global economy more deeply and for longer.