The International Monetary Fund (IMF) projects real gross domestic product (GDP) to fall by double digits in Kuwait, Iraq, Qatar and Bahrain in 2026, tying the outlook to interruptions in energy production and transport. Its October World Economic Outlook puts the declines at 16.7% in Kuwait, 16.0% in Iraq, 15.6% in Qatar and 11.3% in Bahrain.
Those numbers are projections for the full year, not recorded 2026 results. In April, the IMF had forecast smaller contractions: 0.6% in Kuwait, 6.8% in Iraq, 8.6% in Qatar and 0.5% in Bahrain. The October estimates therefore represent downgrades of 16.1 percentage points for Kuwait, 9.2 points for Iraq, 7 points for Qatar and 10.8 points for Bahrain, comparing the two IMF releases.
Three of the countries—Bahrain, Kuwait and Qatar—are part of the IMF’s Gulf Cooperation Council grouping, while Iraq is classified separately as a non-GCC oil exporter. The IMF describes these commodity-producing economies as among those most exposed to interruptions affecting energy production and transport. In separate remarks to Gulf Cooperation Council finance ministers and central bank governors on Oct. 1, it also cited lower oil and gas exports, damage to energy facilities, reduced trade and weaker business confidence as effects of the conflict. At an Oct. 15 IMF briefing, Jihad Azour, director of the fund’s Middle East and Central Asia Department, said, “The war in the Middle East is imposing a highly uneven shock to the economies of the region.” The fund says oil exporters outside the conflict zone may benefit from more favorable terms of trade.
October’s projections also show declines of 7.6% in Iran, 3.9% in the United Arab Emirates and 3.3% in Saudi Arabia for 2026.
The IMF expects sharp growth in the four hardest-hit economies in 2027: 19.0% in Iraq, 18.8% in Qatar, 17.1% in Kuwait and 13.9% in Bahrain. The fund bases those gains on a recovery in output, export shipments and transport capacity. In the WEO’s baseline, reopening of the Strait of Hormuz begins in March 2027. The IMF assumes wider conditions will move close to prewar levels by October that year.
