Details: The economies of the Middle East and Central Asia, which the Washington-based institution groups as one region, are forecast to contract by 0.3% in 2026, a sharp downgrade from the 1.9% expansion the IMF projected in April. 

The IMF cited the prolonged disruption to shipping in the Strait of Hormuz, a conduit for one-fifth of global oil supplies in peacetime, for the downgraded outlook.

Kuwait, Iraq and Qatar face the most severe contractions in gross domestic product, at 16.7%, 16% and 15.6%, respectively. Bahrain is forecast to shrink by 11.3%.

The United Arab Emirates' economy is expected to contract by 3.9% this year before rebounding at a 7.7% growth rate in 2027.