Jakarta, CNBC Indonesia \u2013 The International Monetary Fund (IMF) has\noffered its assessment of Middle Eastern countries in its World Economic\nOutlook (WEO) Update for July 2026.<\/p>\n
Whilst a number of Asian countries are still projected to grow\nstrongly, the Middle East is among the groups most vulnerable in the\nIMF\u2019s economic growth projections.<\/p>\n
The main cause is a war that has disrupted energy routes and driven\nup energy commodity prices.<\/p>\n
In the report, the IMF estimates that growth in the Middle East and\nCentral Asia will fall sharply to 0.7% in 2026. In 2025, the region\nstill grew by 3.7%.<\/p>\n
However, in 2027 growth is expected to surge to 6.5%, assuming an\nimprovement in energy conditions and global supply routes.<\/p>\n
The Middle East and North Africa region is even projected to contract\nby 0.5% in 2026 before rebounding to 7.3% growth in 2027. This indicates\nsignificant pressure in 2026.<\/p>\n
Egypt is one of the countries still projected to grow fairly\nstrongly. The Egyptian economy is expected to grow 4.6% in 2026, higher\nthan the 4.4% achieved in 2025. Egypt\u2019s projection has also been revised\nup by 0.4 percentage points from the April 2026 report.<\/p>\n
Saudi Arabia is still projected to grow positively, but at a sharply\nreduced pace. Its economy is expected to grow only 1.7% in 2026, far\nbelow the 4.6% recorded in 2025. By 2027, Saudi growth is expected to\nrecover to 5.5%.<\/p>\n
The IMF said Saudi Arabia is relatively less affected than several\nother commodity producers in the region because it has more diversified\nexport routes. Even so, pressure from the war and energy disruptions has\nstill led to a 1.4 percentage point downgrade to its 2026\nprojection.<\/p>\n
Iran faces the heaviest pressure. The Iranian economy is projected to\ncontract by 5.4% in 2026, after already declining 0.8% in 2025.<\/p>\n
Interestingly, Iran\u2019s 2026 projection has actually been revised up by\n0.7 percentage points compared with the April report. The IMF explained\nthis upgrade reflects better-than-expected oil exports in March and\nApril, as well as the partial easing of export restrictions. Overall,\nhowever, the Iranian economy is still expected to experience a fairly\ndeep contraction.<\/p>\n
Energy Producers Hit Hardest<\/p>\n
The July 2026 WEO report also highlights several energy-producing\ncountries severely affected by disruptions to energy output and\ntransport.<\/p>\n
Iraq, Kuwait and Qatar are the commodity producers most affected by\ndisruptions to energy production and transport. All three are projected\nto experience sharp contractions in 2026.<\/p>\n
This contrasts with Saudi Arabia, which is relatively more insulated\nthanks to its more diversified export routes.<\/p>\n
Pressure in the Middle East is also closely tied to the Strait of\nHormuz. Under the baseline scenario of the July 2026 WEO, the reopening\nof the Strait of Hormuz is assumed to begin in mid-July 2026, with\nconditions expected to return to near pre-war levels by March 2027.<\/p>\n
This assumption matters because the Strait of Hormuz is one of the\nworld\u2019s most strategic energy routes. Disruption to this route has an\nimmediate knock-on effect on oil and gas supplies, commodity prices,\ninflation and the exchange rates of developing countries.<\/p>\n
As a result, the Middle East\u2019s projected growth in 2026 looks very\nweak, before surging in 2027. The large increase in 2027 does not mean\nthe region is truly risk-free, but rather reflects a recovery as the\nsevere energy disruptions of 2026 begin to subside.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/imfs-latest-forecast-for-saudi-arabia-and-iran-paints-a-grim-picture-1783659110", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }