WASHINGTON, 15 April. - (ANA) - The International Monetary Fund on Tuesday lowered its growth forecast for the Middle East as the Iran war strains global energy supply chains.

 

In its latest World Economic Outlook, the IMF expects growth in the Middle East and Central Asia of 1.9 per cent this year, down by 2 percentage points from its estimate in January. The region's growth is expected to rebound to 4.6 per cent next year, assuming energy production and transport return to normal levels in the coming months.

 

“The dominant force for them is the fact that they are in the path of war right now, and that leads to a very significant downgrade and sometimes even negative growth rates for a number of them,” IMF chief economist Pierre-Olivier Gourinchas said of the countries concerned.

 

Oil prices have surged more than 30 per cent since the war began on February 28, while natural gas prices have been volatile following an Iranian air strike on Qatar's Ras Laffan Industrial City.

 

Saudi Arabia and the UAE received downwards revisions for 2026, although growth of 3.1 per cent is expected for both this year before expansion of 4.5 per cent and 5.3 per cent in 2027, respectively. For Oman, growth of 3.5 per cent and 3.4 per cent is forecast for 2026 and 2027, respectively.

 

Economies with badly damaged infrastructure and less access to alternatives to export routes, such as Bahrain, Iran, Iraq, Kuwait and Qatar, are forecast to contract in 2026. The IMF estimates Qatar's economy will shrink by 8.6 per cent this year, before swinging to the same level of growth in 2027. Bahrain and Kuwait's economies are projected to contract by 0.5 per cent and 0.6 per cent before rebounding by 4.5 per cent and 2.8 per cent, respectively, next year.

 

 

 

 

The fund also downgraded its forecast for the global economy and flagged a possible downturn.

 

The IMF estimates the global economy will slow to 3.1 per cent growth in 2026 – 0.2 percentage points lower than its January forecast – from 3.4 per cent last year, before rebounding to 3.2 per cent in 2027. The fund also raised its forecast for global inflation this year and next, at 4.4 per cent and 3.7 per cent, respectively.

 

Tuesday's oil shock has parallels with the 1973 embargo, when Opec producers cut off exports to the West and crude prices quadrupled. If the current conflict were now to end permanently, the accumulated loss of oil would be 2 per cent of global consumption – similar to the 1970s oil crisis, Mr Gourinchas said.

 

The IMF's flagship economic wellness check comes a day after US President Donald Trump implemented a naval blockade on the Strait of Hormuz after talks between the US and Iran in Islamabad failed to achieve a lasting ceasefire.

 

The latest outlook underscores the drag the Iran war is expected to have on the global economy, offsetting gains made by artificial intelligence. The IMF said it would have upgraded its forecast for global growth this year were it not for the war.   - (ANA) -

 

AB/ANA/15 April 2026 - - -