The International Monetary Fund (IMF) on Tuesday released its latest economic outlook, projecting the Middle East and Central Asia region's economy to contract by 0.3% in 2026, a significant downgrade from the 1.9% growth forecast in April. The IMF attributed the downward revision to the US-Israel war against Iran and the resulting prolonged disruption of shipping in the Strait of Hormuz. Among the affected countries, Kuwait, Iraq, Qatar, and Bahrain are expected to see their GDP shrink by 16.7%, 16%, 15.6%, and 11.3% respectively, while Iran's economy is projected to contract by 7.6%. The region is set to be the only one globally to experience negative growth in 2026.