IMF warns Gulf economies will not return to pre-war growth soon

Business Recorder reported that the IMF expects energy-rich Middle Eastern economies to recover, but not quickly enough to regain their earlier growth path in the medium term. Regional director Jihad Azour made the remark in Bangkok on Thursday, as fighting between Saudi Arabia and Yemen's Houthis continued. Those comments came alongside IMF forecasts of a broad downturn across Gulf states, following a conflict that began in Iran months ago.

Newer IMF estimates foresee a 0.3 percent contraction in 2026 for the Middle East and Central Asia, a region facing direct fallout from the Iran conflict. Saudi Arabia is among the hardest hit, with output forecast to fall 3.3 percent, which would mark a rare recession for a kingdom whose economy has long been cushioned by strong energy exports. IMF chief Kristalina Georgieva had warned on Wednesday that continuing attacks on Saudi Arabia could affect people across the world.

Azour said the shock will leave lasting marks on several sectors, damage parts of the infrastructure and call for extra spending to build resilience. Missile strikes have hit airports, energy facilities and the headquarters of Aramco, Saudi Arabia's state-run oil firm, while maritime energy traffic remains affected.