World Bank Forecasts 2.1% Middle East Economic Contraction in 2026

Key Facts

1The World Bank projects the Middle East economy will contract by 2.1% in 2026 due to the ongoing war involving Iran.

The World Bank projects the Middle East economy will contract by 2.1% in 2026. The National reported that this forecast is driven by economic disruptions caused by the ongoing war involving Iran, leading to a revised downward outlook for the region.

Economies within the Gulf Cooperation Council are projected to contract by an average of 4.3% in 2026, a decrease of 5.7 percentage points from April estimates. This decline is attributed to lower export volumes resulting from the closure of the Strait of Hormuz, which has led to significant losses in output and government revenue.