World Bank Slashes Middle East Growth Forecast to 1.8%, Warns of War Scarring

The World Bank cut Middle East growth forecasts from 4% to 1.8% for 2026, a 2.4 percentage point downgrade driven by the Strait of Hormuz closure and infrastructure destruction. Kuwait and Qatar face outright contraction, forecast at -6.4% and -5.7% respectively, reversed from prior growth projections. Saudi Arabia's outlook was cut to 3.1% from 4.3%, UAE's to 2.4% from 5.1%. The bank warned of lasting economic scarring from the conflict, with sharpest deterioration in GCC economies and Iraq.