Bloomberg survey sees Kuwait economy contracting 7.9 percent in 2026
- Analysts said the sharp downgrade reflects Kuwait’s high sensitivity to fluctuations in regional energy markets, shipping routes, and trade activity.
- Saudi Arabia was viewed as the most resilient major Gulf economy, with analysts citing strong domestic demand, continued government spending, and ongoing major development projects.
- Qatar and the UAE also recorded major downward revisions. Qatar’s economy is now forecast to contract by 7.4 percent in 2026 instead of growing by 5.1 percent as previously expected
- UAE’s non-oil economy is expected to contract by 2.8 percent, reversing earlier forecasts of 4.8 percent growth
- Bahrain’s economy could contract by 6 percent during 2026, while Oman appeared to be the least affected Gulf economy
A Bloomberg survey of leading global economic analysts has projected a sharp contraction in Kuwait’s economy during 2026, highlighting the country as one of the Gulf states most heavily affected by regional trade and energy disruptions linked to the Iran war.
The survey, conducted between June 12 and 17 among economists at major international banks, forecast Kuwait’s economy to contract by 7.9 percent in 2026, a dramatic reversal from earlier projections of 3.7 percent growth.
Non-oil economic activity is also expected to decline by 2.2 percent, compared with previous forecasts that anticipated growth of 3.8 percent.
Analysts said the sharp downgrade reflects Kuwait’s high sensitivity to fluctuations in regional energy markets, shipping routes, and trade activity. However, the survey also projected a recovery in 2027, with overall economic growth expected to rebound to 4.6 percent, up from previous forecasts of 3.1 percent.
The report indicated that non-oil economies across the Gulf region are facing slower growth due to the fallout from the regional conflict, with average non-oil growth forecasts revised down to 3 percent for 2026 compared with earlier estimates of 4 percent.
Saudi Arabia was viewed as the most resilient major Gulf economy, with analysts citing strong domestic demand, continued government spending, and ongoing major development projects.
Saudi Arabia’s non-oil growth forecast for 2026 was lowered to 3 percent from 4 percent previously, while its overall economic growth outlook was reduced sharply to 1.6 percent from 4.4 percent. Nevertheless, the Kingdom is expected to recover strongly in 2027 with projected growth of 5.8 percent.
Qatar and the UAE also recorded major downward revisions. Qatar’s economy is now forecast to contract by 7.4 percent in 2026 instead of growing by 5.1 percent as previously expected, while its non-oil economy is projected to shrink by 2 percent.
The UAE’s non-oil economy is expected to contract by 2.8 percent, reversing earlier forecasts of 4.8 percent growth, amid disruptions affecting transport, logistics, and regional trade activity, reports Al-Qabas daily.
The survey showed Bahrain’s economy could contract by 6 percent during 2026, compared with earlier expectations of 3.2 percent growth, while Oman appeared to be the least affected Gulf economy, with growth forecast at 1.4 percent despite a slight downgrade from previous estimates.
Economists said the regional outlook remains heavily tied to the stability of energy markets, shipping routes, and geopolitical developments, with expectations that Gulf economies could gradually regain momentum in 2027 if regional conditions continue to stabilize.
