IMF warns Gulf economies will not return to pre-war growth soon

IMF warns Gulf economies will not return to pre-war expansion shortly.

Key points

• On Wednesday, IMF chief Kristalina Georgieva cautioned that ongoing attacks targeting Saudi Arabia could affect residents "everywhere".
• Saudi Arabia is among the worst affected, with its economy projected to shrink 3.3pc.
• The projection points to a rare recession for the Gulf kingdom.

IMF warns Gulf economies will not return to pre-war expansion shortly. AFP Published October 15, 2026 Updated October 15, 2026 11: 15am. Join our Whatsapp Channel.

As fighting continued between Saudi Arabia and Yemen's Houthis, the International Monetary Fund expects energy-rich Middle Eastern economies to bounce back, but not in the medium term, the organisation's regional chief remarked on Thursday.

Notably, the statement comes as the IMF projects a widespread contraction in Gulf economies after months of war that began in Iran and has now spread to Saudi Arabia and Yemen, with maritime energy traffic still impacted.

"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 in order to increase resilience, " IMF regional director Jihad Azour remarked to journalists.

Meanwhile, the warning comes as authorities and experts huddled in Bangkok this week to discuss headwinds facing the global economy, including stubbornly high energy costs and questions over the sustainability of the artificial intelligence boom.

Meanwhile, the IMF on Tuesday published projections showing that the Middle East and Central Asia region – directly exposed to the Iran war – is anticipated to contract 0.3 per cent in 2026.

Meanwhile, the projection points to a rare recession for the Gulf kingdom. It has long been buffered by robust energy exports.

As well as the headquarters of the kingdom's state oil giant Aramco, a violent battle between a Saudi-led coalition and Yemen's Houthis has sharply escalated in recent days, with fatal missile strikes hitting airports and energy facilities.

In short, IMF warns Gulf economies will not return to pre is the central thread here, and readers can expect follow-up reporting as the picture becomes clearer.