World Bank Slashes MENA 2026 Growth Forecast to 1.8% Amid Strait of Hormuz Crisis and Energy Supply Shocks
The World Bank has issued a dramatic downward revision for the Middle East and North Africa (MENA) region, cutting its 2026 growth forecast to 1.8%, down from a January estimate of 3.6%. The report, released ahead of the Spring Meetings in Washington, cites the closure of the Strait of Hormuz and targeted attacks on energy infrastructure as the primary drivers of this regional economic paralysis. While Saudi Arabia remains the region's top performer, its growth projection was lowered to 3.1%, while the Qatari and Kuwaiti economies face significant contraction due to stalled LNG and crude oil exports.
The report underscores that the recent conflict has inflicted "immediate and severe economic damage," destabilizing markets and heightening financial volatility. Despite a last-minute two-week ceasefire mediated between the U.S. and Iran—avoiding threatened large-scale strikes—the World Bank warns that the region remains vulnerable. Excluding Iran, regional growth is expected to plummet from 4.0% in 2025 to just 1.8% in 2026, a massive 2.4 percentage point drop that highlights the urgent need for structural reforms and enhanced economic governance to withstand such systemic shocks.