The International Monetary Fund (IMF) in its recent report has predicted that the economies of the Middle Eastern and North African countries will experience significant growth next year, particularly following disruptions caused by the war and the closure of the Strait of Hormuz. While it is expected that the economies of these countries will shrink by 2 percent this year, they are expected to experience a growth of 7 percent next year.
Economic Challenges of Iran
According to this report, Iran's economy will shrink by 7.6 percent this year compared to last year. It is predicted that next year, the economic growth of this country will only reach 3.6 percent; a growth that is clearly insufficient to compensate for the economic decline of this year. In contrast, the economies of Iraq, Kuwait, and Qatar, which have a high dependency on the Strait of Hormuz, are expected to shrink by about 16 percent this year, but are predicted to grow between 17 to 19 percent next year.
Read more: Global Economic Growth Forecast by the International Monetary Fund for 2026
Situation of Other Countries in the Region
The United Arab Emirates and Saudi Arabia are also expected to face an economic decline of more than 3 percent this year, but are expected to experience growth close to 8 percent next year. Meanwhile, Oman, as the only country in the region that will have a positive economic growth of 4.4 percent this year due to its lack of dependency on the Strait of Hormuz, can be considered a model.
The Islamic Republic of Iran, in the early months of the war, disrupted the foreign trade and energy exports of neighboring countries by creating challenges in the Strait of Hormuz. However, recent reports indicate that the oil production of OPEC member countries, excluding Iran, has nearly returned to pre-war levels last month. Additionally, data from tanker tracking companies shows that oil exports from regional countries have reached pre-war levels this month.
Iran's daily oil production has dropped by 40 percent to below two million barrels compared to pre-war levels, and the country's oil exports have been halted since mid-July due to the U.S. maritime blockade. The International Monetary Fund has also predicted that Iran's annual inflation rate will peak at around 79 percent this year and will be 42 percent next year. This decrease in the inflation rate does not mean that goods and services will become cheaper, but rather that the rate of price increases will slow down.
With this forecast, Iran will have the highest inflation rate in the world this year after Venezuela. In contrast, Gulf Arab countries and Oman are expected to experience inflation rates below 5 percent. Especially in Saudi Arabia and Kuwait, the inflation rate will be lower than last year's level.
Overall, the International Monetary Fund has predicted that the global economy will grow by 3.1 percent this year and that global inflation will reach 4.7 percent, while Middle Eastern countries, especially Iran, are facing more serious economic challenges.
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