World Bank predicts 2026 Gulf contraction
The World Bank expects the Gulf economies to shrink by 4.3% in 2026 due to the ongoing conflict that began in February 2026 and its impact on the region, particularly the closure of the Strait of Hormuz, which affected oil exports and government revenues. Gulf economies have also experienced declines in tourism, aviation, and logistics services, leading to increased financial uncertainty and a decline in market confidence. Meanwhile, some oil-importing countries have managed to avoid or adapt to the crisis, with projections of their growth rebounding to 4.3% in 2026. If the conflict ends by the end of 2026, regional growth could rebound to 7.8% in 2027, emphasizing the importance of protecting households and improving infrastructure. The report also notes that artificial intelligence significantly boosts productivity, with less than 10% of jobs currently threatened by automation, and calls for enhanced regional cooperation and the development of technological capabilities.
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