Oman to maintain 2.4% growth this year: IMF

Muscat: The Sultanate of Oman will be the only country in the Gulf that is expected to maintain positive growth this year, at 2.4% as the International Monetary Fund (IMF) sharply cut growth forecasts for the Middle East and Central Asia in 2026, as the ongoing war has sent economies into a tailspin.

In its latest World Economic Outlook report, the IMF said the regional economy was projected to contract by 0.3 percent, compared to its projected 1.9 percent growth six months ago. It cited 'a longer closure of the Strait of Hormuz, compared with the baseline assumptions in the April' report, predicting a major rebound in 2027 based on the expected reopening of the waterway. Since the war began in late February with US-Israeli strikes on Iran, Tehran has sought to impose its control over the Strait of Hormuz, repeatedly attacking ships that transit without its authorisation. The United States has imposed its own counter-blockade on Iranian ports, and has escorted friendly ships through the waterway in increasing numbers. According to the IMF, the countries most affected by shipping and production disruptions are Iraq, Kuwait, Qatar and Bahrain, all of which suffered damage to oil installations during the fighting. 
They are 'projected to experience double-digit contractions of their economies in 2026, followed by double-digit expansions in 2027 as production, exports, and logistics normalise'. 
Saudi Arabia's GDP is expected to contract by 3.3 percent this year, before rebounding to 7.9 percent growth next year, the global lender said. The forecast was made before a series of deadly attacks on the Riyadh airport that began last week. 
The fund noted that the kingdom -- the world's largest crude exporter -- is among the least affected in the region, pointing to 'an economy with more diversified export routes'. 
Saudi Arabia has made use of its East-West oil pipeline to bypass the Hormuz strait and send crude to its Red Sea coast. However, the pipeline was temporarily shut in September after it was hit by strikes. 
The United Arab Emirates, which has coastal access to both sides of the Hormuz strait, is projected to see its economy contract by 3.9 percent. 
The IMF also projected a contraction of Iran's outlook, with a 7.6 percent decline in GDP as a result of the war, the blockade and US sanctions. Other Arab countries are expected to remain 'relatively resilient' in the face of price shocks from energy and food, the lender said.