IMF cuts Gulf growth forecasts as prolonged Hormuz closure bites

The International Monetary Fund used its 2026 annual meetings in Bangkok to downgrade its growth outlook for the Gulf, citing the continuing closure of the Strait of Hormuz and resulting disruption to oil exports, shipping insurance and investor confidence. The Fund said the hit falls hardest on Saudi Arabia, the United Arab Emirates, Kuwait and Iraq, where lower crude shipments and higher logistics costs are more than offsetting the benefit of elevated oil prices. The downgrade sits alongside the IMF's wider World Economic Outlook, which held global growth at 3.1% for 2026 but warned that resilience is near its limits and that lower-income energy importers face a sharply tougher environment. Policymakers highlighted the geopolitical premium baked into crude: Brent was trading around 105 dollars a barrel and WTI near 95 dollars earlier in the week, with Saudi Arabia having raised September output by roughly a third as the US helped facilitate the movement of more than 19 million barrels through the strait. The IMF called on Gulf states to accelerate non-oil diversification, deepen sovereign-wealth-backed investment in logistics and AI infrastructure, and build fiscal buffers for a scenario in which the Hormuz disruption persists into 2027.