World Bank projects 2.1 percent MENA contraction in 2026 as Hormuz closure hits Gulf

The World Bank forecasts regional output contracting 2.1 percent on average in 2026, with the Strait of Hormuz closure weighing on Gulf oil exporters.

• The World Bank expects regional output to contract 2.1 percent on average in 2026, following 3.3 percent growth in 2025.
• Gulf Cooperation Council economies are forecast to contract 4.3 percent on average because of falling exports and government revenues after the Hormuz closure.
• The World Bank raised Egypt's growth forecast for the current fiscal year to 4.3 percent from 4 percent.
• The report said growth could rebound to 7.8 percent in 2027, excluding Iran, if the conflict subsides by end-2026.
• Egypt lost about $16.5 billion in Suez Canal revenues between November 2023 and July 2026, the World Bank said.
• The World Bank raised Egypt's fiscal 2025/2026 growth forecast to 5.1 percent from 4.3 percent, citing resilience amid regional unrest.
• The bank reported net foreign assets of $28 billion in June 2026 and total official reserves of about $57.2 billion.
• The World Bank projected Egypt's budget deficit to fall to 6.5 percent of GDP in fiscal 2026/2027.