IMF Cuts 2026 Gulf Growth Forecasts Amid Prolonged Strait of Hormuz Closure

Key Facts

The International Monetary Fund reduced economic growth forecasts for Gulf nations for 2026, citing the prolonged closure of the Strait of Hormuz. The National reported that the downgrade is driven by ongoing maritime disruptions in the critical waterway, which are severely impacting the region's trade and oil export capabilities.

The revised projections reflect significant structural risks, with the IMF forecasting the UAE economy to contract by 3.9% in 2026, while Bahrain, Kuwait, and Qatar face double-digit contractions. This outlook coincides with broader global pressure from rising borrowing costs, as the 10-year US Treasury yield recently traded at its highest level since 2002.