Middle East and Central Asia's economy to shrink in 2026 amid war, IMF says Share Middle East and Central Asia's economy to shrink in 2026 amid war, IMF says on social media The economy of the Middle East and Central Asia is set to shrink in 2026 amid the fallout of the US-Israel war on Iran, with countries such as Kuwait and Qatar facing double-digit contractions, according to the International Monetary Fund (IMF). The region's gross domestic product (GDP) is forecast to contract by 0.3 percent this year, a sharp downgrade from the 1.9 percent expansion projected in April, the IMF said in its latest economic outlook on Tuesday. Kuwait, Iraq and Qatar are forecast to have the most severe economic contractions, with their GDPs expected to shrink by 16.7 percent, 16 percent and 15.6 percent, respectively. Bahrain's GDP is forecast to contract by 11.3 percent, while Iran's economy is projected to shrink by 7.6 percent. Saudi Arabia, which has partially offset the hit to its energy sector by boosting oil exports through the East-West pipeline, is projected to record negative growth of 3.3 percent.