IMF Warns Gulf Recovery Will Take Time

The International Monetary Fund warned on Thursday that Gulf economies should not expect to return to their prewar growth trajectory in the medium term, as prolonged conflict and disruption to energy production and trade weigh unevenly on the region. Jihad Azour, the IMF’s regional director, said the shock was causing lasting damage to several sectors, disrupting infrastructure and requiring additional spending to build resilience. He said the economic outlook depended on how quickly energy production and trade normalized, and on governments’ ability to preserve economic stability. The IMF projects that the Middle East and Central Asia region directly exposed to the war will contract 0.3% in 2026. Saudi Arabia’s economy is forecast to shrink 3.3% that year. Separately, the Fund projects a 1.3% contraction in 2026 for the broader Middle East, North Africa and Pakistan region, following 3.3% growth in 2025, with growth of 6.6% in 2027. Those regional figures cover different geographic groupings. The IMF’s outlook also describes a sharp but uneven rebound in 2027 as energy production and trade recover.