GCC economies are projected to rebound by 10.3% in 2027 if the regional conflict eases by the end of 2026, with the recovery expected to be driven by renewed hydrocarbon production, exports, shipping, trade, tourism and domestic activity.
GCC economic growth, Gulf economic recovery and 2027 growth prospects are expected to strengthen significantly if regional conditions stabilise and oil production and shipping return to normal, according to the World Bank’s latest regional economic outlook.
The World Bank projects GCC economies to contract by 4.3% in 2026 before rebounding by 10.3% in 2027, assuming the conflict subsides by the end of this year and hydrocarbon production and export activity recover. The projected recovery is also expected to benefit from the restoration of trade, tourism and domestic economic activity following disruptions to regional economic activity and shipping through the Strait of Hormuz.
The wider Middle East, North Africa, Afghanistan and Pakistan region is projected to contract by 2.1% in 2026, compared with 3.3% growth in 2025. Excluding Iran, regional growth could rebound to 7.8% in 2027, largely supported by the recovery of hydrocarbon production and exports. The World Bank noted that the recovery will depend on sustained policy efforts and improved regional conditions.
Saudi Arabia outlook
Saudi Arabia’s economy is projected to contract by 2% in 2026 before growing by 7.9% in 2027. The Kingdom has been partly shielded from oil export disruptions through its East-West Pipeline, which transports crude to Yanbu on the Red Sea.
Thomas Kuruvilla, managing partner of Arthur D. Little Middle East and India, said Saudi Arabia is entering the projected recovery with a broader economic base than in previous oil cycles.
Construction, logistics, business services, tourism and hospitality are expected to benefit from stronger economic activity, while continued investment under Vision 2030 could support longer-term development.
Kuruvilla also highlighted the importance of converting the recovery in oil activity into stronger private-sector investment, productivity and economic activity. He expects Saudi Arabia’s tourism sector to benefit from the country’s growing pipeline of hospitality, entertainment and destination development projects.
Wider GCC outlook
The World Bank projects significant differences in the pace of recovery among GCC economies.
Qatar’s economy is forecast to grow by 26.7% in 2027, supported by the resumption of liquefied natural gas production, while Kuwait is projected to expand by 22% as oil exports normalise.
The UAE is expected to record 9.5% growth, followed by Bahrain at 4.2% and Oman at 3.4% in 2027.
Kuruvilla said greater regional stability and stronger economic activity could improve investor confidence across the region. He added that stronger private-sector cash flows, commercially attractive opportunities and greater risk-sharing with private investors would be important indicators of whether the recovery develops into a broader and more durable improvement in the GCC economic outlook.