Bangkok: Gulf economies will take time to regain their growth momentum after months of conflict, the International Monetary Fund (IMF) said on Thursday, warning that damage to infrastructure and disruption across industries would leave lasting economic effects.
IMF regional director Jihad Azour said the region was expected to recover, but would not return to its previous growth path over the medium term.
Speaking to reporters during the IMF and World Bank annual meetings in Bangkok, he said governments would also need additional spending to strengthen their economies against future shocks.
The warning comes as fighting between a Saudi led coalition and Yemen’s Houthis intensifies, prolonging uncertainty over energy supplies and maritime shipments.
The IMF’s projections, released on Tuesday, showed that the Middle East and Central Asia region was expected to contract by 0.3 percent in 2026.
Saudi Arabia faces a projected contraction of 3.3 percent, placing it among the economies worst affected by the conflict. The forecast signals a rare recession for a kingdom whose energy exports have historically provided a substantial economic cushion.
Months of war, which began in Iran and spread to Saudi Arabia and Yemen, have disrupted maritime energy traffic and kept global energy costs elevated.
Recent fighting has included deadly missile strikes on airports and energy facilities, as well as the headquarters of Saudi state oil company Aramco.
IMF Managing Director Kristalina Georgieva said on Wednesday that continuing attacks on Saudi Arabia could have consequences for people worldwide.
The conflict’s economic impact is among the central concerns at the Bangkok meetings, alongside persistent energy price pressures and uncertainty over whether the boom in artificial intelligence investment can be sustained.
