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The International Monetary Fund predicts that the Middle East and Central Asia will face economic contraction of 0.3 percent in 2026 due to disruptions caused by the US-Israel war on Iran, particularly affecting countries like Kuwait (-16.7%), Iraq (-16%), Qatar (-15.6%), Bahrain (-11.3%), and Iran (-7.6%). In contrast, Kyrgyzstan is forecasted for a 9 percent growth, making it an outlier in the region. The IMF warns that global risks such as further conflict escalation and AI-related uncertainties could worsen economic prospects worldwide.
Written locally by qwen2.5:14b on 2026-10-13,
using this article's own text rather than the other coverage of the
same event (that is the story summary below).
Story summary
The International Monetary Fund (IMF) has predicted that the economy of the Middle East and Central Asia will contract by 0.3% in 2026, a significant shift from its previous projection of a 1.9% growth in April. This downgrade is attributed to the ongoing impact of the US-Israel war on Iran and disruptions in shipping through the Strait of Hormuz, which typically handles one-fifth of global oil supplies. Countries like Kuwait, Iraq, and Qatar are expected to face severe economic contractions of 16.7%, 16%, and 15.6% respectively. Bahrain is also anticipated to experience a significant downturn in its GDP growth due to the same factors. These forecasts highlight the region's vulnerability to geopolitical conflicts and their broader economic implications.
Written for “Economy Shrinkage Forecast” on 2026-10-13,
grounded in this article and the 0 other(s) covering the same event.
Why this leaning score
This article does not take a side on a contested political
question, so it has no leaning score. That is an
answer rather than a gap: a match report or a rescue can be warmly
or critically written without being left or right, and scoring it
anyway is how approval of a subject gets recorded as a political
position.
No political leaning scored for article 75804 · logged 2026-10-13
The economy of the Middle East and Central Asia is set to shrink in 2026 amid the fallout of the US-Israel war on Iran, with countries such as Kuwait and Qatar facing double-digit contractions, according to the International Monetary Fund (IMF).
uncertain
countries → set → Fund
The region’s gross domestic product (GDP) is forecast to contract by 0.3 percent this year, a sharp downgrade from the 1.9 percent expansion projected in April, the IMF said in its latest economic outlook on Tuesday.
asserted
IMF → forecast → Tuesday
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The IMF cited the prolonged disruption to shipping in the Strait of Hormuz, a conduit for one-fifth of global oil supplies in peacetime, for the downgraded outlook.
Kuwait, Iraq and Qatar are likely to experience the most severe economic contractions, with their GDPs forecast to shrink by 16.7 percent, 16 percent and 15.6 percent, respectively.
Bahrain’s GDP is forecast to contract by 11.3 percent, while Iran’s economy is projected to shrink by 7.6 percent.
uncertain
economy → wave → percent
Saudi Arabia, which has partially offset the hit to its energy sector by boosting oil exports through the East-West pipeline, is estimated to record negative growth of 3.3 percent.
asserted
which → offset → percent
Kyrgyzstan is projected to have the strongest growth in the region, with GDP forecast to expand 9 percent.
asserted
GDP → project → region
The Middle East and Central Asia is the only region that is likely to experience negative growth in 2026.
asserted
that → experience → 2026
Emerging and developing Asia’s GDP is forecast to grow 5.1 percent, while the economies of Sub-Saharan Africa and Latin America and the Caribbean are expected to expand 4.5 percent and 2.3 percent, respectively.
asserted
economies → emerge → percent
The United States and China, the world’s two largest economies, are forecast to register growth of 2.3 percent and 4.5 percent, respectively, while the eurozone’s GDP is estimated to grow 1.1 percent.
asserted
GDP → forecast → percent
The IMF said it expected global GDP to grow 3.1 percent, up from 3 percent in its previous outlook.
asserted
GDP → say → outlook
The Washington, DC-based institution said while economic activity had proved resilient this year, the global economy faced multiple risks.
asserted
economy → base → risks
“Further escalation in conflicts, a reassessment of expectations surrounding artificial intelligence (AI), renewed trade tensions, and fiscal vulnerabilities could weaken growth,” it said.
uncertain
it → surround → growth
“On the upside, stronger momentum in AI investment and productivity gains from AI or a sustained easing of geopolitical and trade tensions could strengthen growth.”
uncertain
momentum → strengthen → growth
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