World Bank forecasts 10.3% Gulf growth in 2027 if oil flows recover

Mixed · 2The World Bank forecasts that Gulf Cooperation Council (GCC) economies will contract 4.3% in 2026 and then grow 10.3% in 2027, assuming oil production and shipping return to normal from early 2027. 1 2 Centre · 1The forecast appears in the World Bank's report "From Divide to Opportunity: AI, Jobs, and Growth", published on October 6. 2 Mixed · 2The World Bank links the downturn to the conflict involving Iran, which began in February and has caused extensive disruption in the Strait of Hormuz. Gulf News reports that the closure cut oil export volumes and that higher prices did not make up for the lost volumes. 1 2

Centre · 1According to the report, Gulf oil production fell from about 26 million barrels per day before the conflict to around 16 million barrels per day in March. Tourism, aviation and logistics were also hit, and higher shipping costs pushed up food prices in parts of the region. 2 Mixed · 2Country forecasts for 2026 and 2027 are: Qatar -20.9% then +26.7% (as liquefied natural gas production resumes); Kuwait -14.6% then +22% (as oil exports normalise); Saudi Arabia -2% then +7.9%; the UAE -1.6% then +9.5%; Bahrain -2.9% then +4.2%; and Oman +3.1% then +3.4%, the only Gulf economy forecast to grow in 2026. 2 1 Right · 1Saudi Arabia has been partly shielded from the export disruption by the East–West Pipeline, which carries crude to Yanbu on the Red Sea. 1

Right · 1For the wider Middle East, North Africa, Afghanistan and Pakistan (MENAAP) region, the World Bank projects a 2.1% contraction in 2026 after 3.3% growth in 2025. If the conflict subsides by the end of 2026, it projects the region excluding Iran to rebound 7.8% in 2027, while stressing that recovery is not guaranteed. 1 Centre · 1The World Bank said the GCC's 10.3% expansion largely reflects restored oil production and exports rather than a sudden improvement in underlying productivity. It cautioned that damaged infrastructure, postponed investment and depleted fiscal buffers could keep weighing on economies after the shock fades. 2 Centre · 1UAE Minister of Tourism and Economy Abdullah bin Touq Al Marri told CNN that a rebound of about 10% should be read as output pushed from one year into the next, calling it a "counterattack", and said the key question is whether the extra activity goes into advanced manufacturing, logistics and AI. 2

Right · 1Thomas Kuruvilla of Arthur D. Little Middle East and India told Arab News that Saudi Arabia enters the rebound with a broader economic base than in earlier oil cycles, and that the question for 2027 is how far the oil recovery turns into private-sector activity, productivity and investment. 1 Centre · 1The report also covers artificial intelligence: the World Bank estimates AI could improve productivity in 13% to 20% of jobs across the region, with fewer than 10% of jobs facing near-term automation risk, and says the UAE and Saudi Arabia are the only regional countries ranked in the global top 25 for both AI model development and high-performance computing. 2