Bahrain’s economy seen contracting 0.5% in 2026 amid regional conflict – IMF

Bahrain’s economy is expected to contract in 2026 before returning to growth in 2027, as regional conflict disrupts energy markets and trade flows, the International Monetary Fund (IMF) said on Tuesday.

In its latest World Economic Outlook, the IMF forecast Bahrain’s economy would shrink by 0.5 per cent in 2026, revising down its previous estimate, before rebounding to 4.5 per cent growth in 2027.

The Fund said Bahrain is among several economies, including Iran, Iraq, Kuwait, and Qatar, expected to contract in 2026 due to damage to energy infrastructure and limited access to alternative export routes.

Like other oil-exporting countries, Bahrain faces pressure from disruptions to energy infrastructure and key shipping routes, including the Strait of Hormuz, the IMF said.

However, the outlook remains uncertain, with risks tied to the duration and intensity of the conflict and its impact on global energy markets.

Attribution: Amwal Al Ghad English