US-Iran War Live Latest News: The economic damage from the war in the Middle East could continue long after the fighting ends, with the International Monetary Fund (IMF) warning that Gulf economies may struggle to return to their pre-war growth paths in the medium term.
Disrupted energy shipments, damage to infrastructure and rising security costs are putting pressure on countries that have long relied on oil and gas revenues to support economic growth.
The IMF’s latest outlook projects a 0.3% contraction across the Middle East and Central Asia in 2026, while Saudi Arabia’s economy could shrink by 3.3% as the conflict and attacks on regional infrastructure weigh on business activity.
You Might Be Interested In
US-Iran War Live Latest News: IMF Says Middle East Economies May Not Return to Pre-War Growth Soon
IMF regional director Jihad Azour warned that the economic impact of the war could last beyond the immediate disruption. He said damage to infrastructure, pressure on several sectors and the need for additional spending to improve resilience would make it difficult for economies to return quickly to their earlier growth paths.
“We will not go back to the pre-war trajectory in the medium term because this shock will have a scarring impact on various sectors and also will disrupt a certain number of infrastructure and will require additional spending to increase resilience,” Azour told reporters.
The warning highlights the longer-term challenges facing governments across the region. Even if fighting eases, countries may need to repair damaged infrastructure, restore transport and energy links, support affected businesses and spend more on protecting critical facilities.
The IMF has also warned that the outlook depends on how quickly shipping and energy production return to normal. Continued disruption could further weaken growth, delay investment and make economic diversification more difficult.
US-Iran War Live Latest News: IMF Forecast: Middle East and Central Asia Economy to Shrink 0.3% in 2026
The IMF’s latest regional forecast marks a sharp downgrade from its earlier expectations. The fund now expects the Middle East and Central Asia economy to contract by 0.3% in 2026, compared with the 1.9% growth it projected in April.
The war has disrupted energy production and shipping, particularly through the Strait of Hormuz, a critical route for global oil supplies. These disruptions have increased uncertainty for energy exporters and importers, while higher fuel and transport costs are adding pressure to businesses and households.
Comments
0 commentsNo comments yet — be the first.