IMF Sees West Asia and Central Asia Shrinking 0.3 Percent in 2026, With Kuwait, Iraq and Qatar Hit Hardest

In its latest economic outlook, released on Tuesday 13 October 2026 (21 Mehr 1405), the International Monetary Fund forecast that the combined GDP of its West Asia and Central Asia country grouping will shrink about 0.3 percent in 2026. That is a sharp downgrade from the 1.9 percent growth it projected in April. The Fund pointed mainly to the prolonged disruption to shipping through the Strait of Hormuz, a conduit for one-fifth of global oil supplies in peacetime.

According to Al Jazeera's report on the outlook, the deepest contractions are forecast for Kuwait (16.7 percent), Iraq (16 percent) and Qatar (15.6 percent), with Bahrain's economy shrinking 11.3 percent. Iran is projected to contract 7.6 percent and Saudi Arabia 3.3 percent; Riyadh has offset part of the hit to its energy sector by lifting exports through the East-West pipeline. Kyrgyzstan is expected to post the strongest growth in the grouping at 9 percent, and the grouping is the only world region forecast to contract this year.

The IMF expects global growth of 3.1 percent in 2026, up from 3 percent in its previous outlook, with the United States at 2.3 percent, China at 4.5 percent and the euro area at 1.1 percent. It listed further escalation of conflicts, a reassessment of expectations around artificial intelligence, renewed trade tensions and fiscal vulnerabilities as the main risks to growth.