The IMF released a March 2026 assessment that Kuwait’s real GDP will contract 16.7% in 2026, the steepest decline among Gulf states.
Iraq, Qatar, and Bahrain are projected to see 16.0%, 15.6%, and 11.3% contractions respectively, while Iran, the UAE, and Saudi Arabia face 3–8% declines, according to the same report.
The war has disrupted Gulf shipping lanes, leading to a sharp rise in the Fed’s Global Supply Chain Pressure Index, which hit 1.81 in May 2026 – the highest reading since the 2021 COVID surge.
In response, Riyadh and Abu Dhabi have convened emergency sessions to devise fiscal and monetary measures, and the IMF has called for targeted stimulus to cushion the economic blow.