The IMF’s October 2026 forecast projects that the Middle East and Central Asia economy will contract 0.3% in 2026, then grow 6.3% in 2027. The regional average masks sharp differences: Bahrain, Iraq, Kuwait and Qatar face double-digit contractions, while Oman is forecast to grow. The projected rebound depends on energy production, exports, shipping and logistics returning toward normal.
What the October forecast says
Two October 13, 2026 reports attribute the regional projections to the IMF’s October World Economic Outlook (WEO). The 2026 figure is a 2.2 percentage-point downgrade from the April forecast; the 2027 estimate is 1.7 percentage points higher. The IMF wording, as quoted by IANS, says the changes are “consistent with a longer closure of the Strait of Hormuz, compared with the baseline assumptions in the April WEO, and a corresponding larger rebound after the Strait reopens.”
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The October estimates are reported by IANS and AFP. The figures are attributed to the IMF, but a directly accessible October WEO publication page is not established here.
Which countries are forecast to contract most?
National projections vary considerably. The country estimates below are attributed to the October 2026 WEO by IANS; Saudi Arabia’s figures are also reported by AFP. They are forecasts, not observed results.
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| Country | 2026 growth forecast | 2027 growth forecast |
|---|---|---|
| Kuwait | −16.7% | +17.1% |
| Iraq | −16.0% | +19.0% |
| Qatar | −15.6% | +18.8% |
| Bahrain | −11.3% | +13.9% |
| Iran | −7.6% | |
| Saudi Arabia | −3.3% | +7.9% |
| United Arab Emirates | −3.9% | +7.7% |
| Oman | +4.1% |
The empty 2027 cells reflect that the October reporting cited here does not give those projections for Iran or Oman. The IMF language quoted by IANS describes “commodity producers most affected by disruptions to energy output and transport.”
Why war and the Strait of Hormuz matter to the forecast
October reporting links the downgrade to the war and closure of the Strait of Hormuz, which disrupted energy output and transport. The effects can extend beyond oil and gas production: the IMF’s April 2026 regional analysis identifies air traffic, logistics, trade, tourism, confidence and financing conditions as channels through which a shock can spread. Those are explanatory channels from the April analysis, not separately quantified October forecasts.
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In remarks on October 1, the IMF managing director said Gulf Cooperation Council (GCC) authorities had rerouted some supplies away from Hormuz. Investment in energy and logistics infrastructure, along with measures to ease shipping bottlenecks, helped limit wider fallout. The remarks also describe a GCC contraction in 2026 and make a strong recovery conditional on shipping normalizing gradually. See the IMF’s October 1 remarks and its April regional outlook update.
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Forecast vintages matter: the July 2026 WEO put regional growth at 0.7% in 2026 and 6.5% in 2027, while the October reporting gives −0.3% and 6.3%, respectively. The July figures are an earlier estimate, not the current October forecast. October reporting says the later revision reflects a longer Hormuz closure than assumed in April. The July regional discussion is available through the IMF eLibrary.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What could bring growth back—and what could delay it?
The 6.3% regional growth projection for 2027 is conditional rather than assured. The October reports base the rebound on normalization of production, exports and logistics; the IMF’s October 1 remarks specifically point to gradual shipping normalization. If disruption continues or returns, the conditions behind the projected rebound would be weakened and recovery could be delayed. The reported figures do not establish how likely either scenario is.
The regional contraction should not be read as a prediction that every country will shrink. The reported country estimates range from Oman’s 4.1% forecast growth in 2026 to Kuwait’s projected 16.7% contraction. For households and businesses, the headline is best understood as a warning about a broad regional shock with uneven national effects, not as a uniform measure of local economic conditions.
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