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The IMF’s October 2026 outlook forecasts that the Middle East and Central Asia economy will contract 0.3% in 2026, then grow 6.3% in 2027. The regional figures, reported by IANS and AFP on October 13, reflect a sharp split between countries: several Gulf producers face double-digit contractions, while Oman is forecast to expand. The projected rebound depends on energy production, exports, shipping and logistics returning toward normal.

What the October 2026 forecast says

The October World Economic Outlook (WEO) puts regional growth at −0.3% in 2026 and 6.3% in 2027, according to figures attributed to the IMF by IANS and AFP on October 13, 2026. The IMF describes the revisions as a 2.2 percentage-point downgrade for 2026 and a 1.7-point upgrade for 2027, compared with the April WEO baseline. The October report links that change to a longer-than-assumed closure of the Strait of Hormuz and a larger rebound after it reopens.

These are regional growth projections, not a prediction that every country will contract. The aggregate combines economies with very different exposure to disrupted energy production and transport, and the projected 2027 rate partly reflects recovery from steep losses in 2026.

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Which countries face the steepest contractions?

The country estimates below are for 2026 and 2027, respectively, as attributed to the IMF’s October 2026 WEO by IANS on October 13, 2026. They are projections, not reported outcomes.

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Kuwait −16.7% +17.1%
Iraq −16.0% +19.0%
Qatar −15.6% +18.8%
Bahrain −11.3% +13.9%
United Arab Emirates −3.9% +7.7%
Saudi Arabia −3.3% +7.9%
Oman +4.1% not stated by IANS
Iran −7.6% not stated by IANS

The largest reported contractions are in Kuwait, Iraq, Qatar and Bahrain, each above 10%. Their projected 2027 expansions are also unusually large, consistent with a recovery scenario in which production, exports and logistics normalize. Those projected rates should not be read as guaranteed growth: the same disruption that deepens the 2026 declines could also delay the rebound.

Why the war and Hormuz closure affect the regional outlook

The October reporting connects the downgrade to the war and closure of the Strait of Hormuz, disrupting energy output and transport. The strait is a critical route for regional shipping, so disruption can affect producers directly and ripple through trade and economic activity elsewhere.

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The IMF’s April 2026 regional outlook explains channels through which an energy and transport shock can spread: energy production and exports, air traffic, logistics, trade, tourism, confidence and financing conditions. These are mechanisms identified in the April analysis, not additional October estimates of each channel’s individual effect.

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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 steps to ease shipping bottlenecks, helped limit broader fallout. The remarks nevertheless said the GCC economy was expected to contract in 2026 and made a strong recovery conditional on shipping gradually normalizing. Read the IMF’s October 1 remarks.

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How the forecast changed from July

The July 2026 WEO had projected regional growth of 0.7% in 2026 and 6.5% in 2027. Those are earlier forecast-vintage figures, not the current October estimates. The October projection shifts 2026 from growth to contraction, while the 2027 estimate is 0.2 percentage points lower than July’s. The earlier regional figures appear in the IMF’s July 2026 WEO regional discussion.

The October WEO wording quoted by IANS says the revision is “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.” In other words, the forecast describes both a deeper near-term shock and a sharper recovery path than the April baseline assumed; it does not establish that reopening or recovery will happen on a particular date.

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What could change the 2027 rebound

The 6.3% regional growth projection for 2027 rests on normalization of production, exports and logistics, including gradual improvement in shipping. A prolonged closure or renewed disruption could keep output and transport constrained and delay the recovery. Conversely, restored shipping and energy flows are central to the rebound scenario described in the October reporting and IMF remarks. The forecast is therefore conditional, rather than a guarantee that the region will return to normal in 2027.

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The October estimates are attributed to the IMF by two wire reports; an accessible official October WEO publication page was not available in the reporting reviewed here. The IMF’s April and July materials and its October 1 remarks provide relevant context, but are not independent confirmation of the October regional numbers.

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