Middle East and Central Asia’s economy to shrink in 2026 amid war, IMF says
Summary
The International Monetary Fund (IMF) says the economies of the Middle East and Central Asia will shrink in 2026, mainly due to disruptions caused by the US-Israel conflict with Iran. Key countries like Kuwait, Iraq, and Qatar are expected to face large economic declines, while other world regions will see growth.Key Facts
- The Middle East and Central Asia’s economy is forecast to shrink by 0.3% in 2026.
- Kuwait, Iraq, and Qatar are expected to have the largest drops, with GDP losses around 16%.
- The conflict has disrupted shipping in the Strait of Hormuz, which handles about 20% of global oil supplies.
- Saudi Arabia’s growth is also negative but less severe (-3.3%) due to increased exports via an alternative pipeline.
- Kyrgyzstan is the only country in the region expected to grow strongly, at 9%.
- Other world regions like emerging Asia and Sub-Saharan Africa are forecast to grow by over 4%.
- The global economy is expected to grow by 3.1% despite various risks including conflicts and trade tensions.
- The IMF highlighted that advances in artificial intelligence could either help or harm future growth depending on investment and policy.
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