World Bank Forecasts 4.3% Contraction in Gulf Economies in 2026

The World Bank expects Gulf economies to shrink by 4.3% in 2026 as the conflict that began in February continues to impose heavy economic costs across the region.

The bank said the impact extends across the Middle East and North Africa, as well as Afghanistan and Pakistan, underscoring the broad economic toll of the ongoing fighting.

For Gulf oil-exporting countries, the closure of the Strait of Hormuz has been the largest burden, according to the bank’s assessment.

The disruption sets the current crisis apart from previous energy shocks. Rather than benefiting from upheaval in energy markets, Gulf exporters face a major obstacle at a critical route for their oil shipments.