IMF Sees Oman Growing 4.1 Percent and Egypt 5.1 Percent Ahead of a 2027 Gulf Rebound
Oman is set to grow 4.1 percent this year, according to the International Monetary Fund’s Regional Economic Outlook for the Middle East and Central Asia, published on 22 October. Egypt is projected at 5.1 percent for its 2026 fiscal year, which runs July to June. The Fund’s baseline assumes the conflict abates in early 2027 and trade then normalises gradually. On that assumption, the Gulf’s oil exporters would stage what the Fund calls “a sharp V-shaped recovery” in 2027.
The country projections draw on the Fund’s World Economic Outlook database and staff calculations. The regional report adds the detail behind them: how Gulf energy output fell and how it is projected to recover, what happens to the external accounts, and two chapters on inflation and trade diversification.
Oman and Egypt keep growing through 2026
Oman is the one GCC economy the Fund expects to expand in 2026. Its 4.1 percent is 1.7 percentage points faster than its 2.4 percent in 2025, on our calculation. Oil and gas production in Oman increased, and growth picked up in the first half of the year. The Fund now sees Oman expanding somewhat faster than it projected in April. The report ties that to Oman’s limited exposure to the Strait of Hormuz. It projects growth of 2.2 percent in 2027 and 2.6 percent in 2031.
Egypt drives the upgrade among the region’s oil importers. Emerging and middle-income oil importers in the Middle East, North Africa, Afghanistan and Pakistan are projected to grow 4.2 percent in 2026, up from 3.9 percent in 2025. That is 0.3 percentage point above the April projection. The Fund credits Egypt, where growth is an estimated 1 percentage point higher than in its April forecast, along with Tunisia.
Egypt’s 5.1 percent is 0.7 percentage point faster than its 2025 pace, on our calculation. It also runs 0.9 point above the group rate, on our calculation. The Fund sees Egyptian growth at 4.7 percent in 2027 and 4.8 percent in 2031. In the first half of 2026, Egypt’s growth stayed broadly in line with the second half of 2025. Net remittances as a share of GDP ran above the same period last year, and hotel occupancy was stable or higher. The report expects Egypt’s external position to strengthen over the medium term, helped by lower commodity prices and export diversification. Egypt’s annual inflation stood at 14.5 percent in August, and the Fund expects a modest deceleration over 2026.
Egypt Outpaces the Oil Importer Average
| Economy | 2025 | 2026 | 2027 |
|---|---|---|---|
| Egypt | 4.4% | 5.1% | 4.7% |
| All MENAP oil importers | 3.7% | 4.2% | 4.4% |
| Emerging and middle income | 3.9% | 4.2% | 4.2% |
| Pakistan | 3.2% | 3.6% | 3.5% |
| Jordan | 2.8% | 2.7% | 3.1% |
Real GDP growth, from the Regional Economic Outlook projections table, October 2026. Egypt and Pakistan figures are for fiscal years running July to June. Oil importers cover the Middle East, North Africa, Afghanistan and Pakistan.
A V-shaped Gulf rebound in 2027
Disruptions to energy trade and production are assumed to last through the first quarter of 2027. On that basis, GCC growth would reach 9.1 percent in 2027, 2.7 times the 3.4 percent the Fund projects for the world economy, on our calculation. Growth across the Middle East, North Africa, Afghanistan and Pakistan is projected at 6.6 percent in 2027, 2 percentage points above the April projection.
Gulf Growth Rebounds in 2027 and Settles by 2031
| Economy | 2025 | 2027 | 2031 |
|---|---|---|---|
| Qatar | 1.8% | 18.8% | 3.3% |
| Kuwait | 2.7% | 17.1% | 2.2% |
| Bahrain | 3.5% | 13.9% | 3.1% |
| GCC | 4.5% | 9.1% | 3.4% |
| Saudi Arabia | 4.6% | 7.9% | 3.6% |
| UAE | 6.2% | 7.7% | 3.5% |
| Oman | 2.4% | 2.2% | 2.6% |
Real GDP growth, from the Regional Economic Outlook projections table, October 2026; ranked by 2027. Regional aggregates are weighted by purchasing-power-parity GDP. The 2026 projections are given in the text.
By 2031, growth settles between 2.2 and 3.6 percent across the six, with Saudi Arabia highest, on our count. The rebound comes mainly from energy. Output of the directly affected exporters fell from 33 million barrels a day in February to an estimated 19 million in May, by the Fund’s count, and restoring damaged facilities and export capacity is expected to lift hydrocarbon output. Saudi Arabia and the UAE were less severely affected, as alternative pipelines helped. The report expects oil output to accelerate in the UAE after its exit from OPEC+. It names Saudi Arabia and the UAE as economies with sizable buffers that could consider easing fiscal policy within a credible medium-term framework.
GCC authorities took decisive measures to keep trade and logistics running, support firms and households and maintain credit. Non-oil activity eased but proved more resilient than expected in most countries. The Fund projects oil to average an estimated 96 dollars a barrel in 2026, against 82.2 dollars in its April forecast. For 2027 it sees an estimated 87 dollars, against 76 dollars in April. For the directly affected exporters, higher energy prices and lower imports have offset the drop in export volumes on the trade balance.
For 2026 itself, the Fund projects GCC output to contract 4.8 percent. It sees declines of 16.7 percent in Kuwait, 15.6 percent in Qatar and 11.3 percent in Bahrain, and of 3.9 percent in the UAE and 3.3 percent in Saudi Arabia. The Fund puts growth across the wider region at an estimated minus 1.3 percent. That is 2.7 percentage points below its April projection. The GCC current account surplus narrows from 5 percent of GDP in 2025 to 1.3 percent in 2026. Even after the rebound, the Fund expects output in these economies to stay generally below pre-conflict projections over the medium term.
Gulf inflation seen averaging under 3 percent, and trade diversification builds resilience
GCC inflation rises from 0.9 percent in 2025 and runs slightly above the Fund’s April forecast. It still stays below the world rate in both 2026 and 2027. It is expected to return to 2 percent from 2028. Lower commodity prices, exchange rate pegs and continued fiscal discipline support that path.
GCC Inflation Runs Below the Global Rate
| Measure | 2026 | 2027 |
|---|---|---|
| GCC inflation | 2.7% | 2.4% |
| World headline inflation | 4.7% | 4.1% |
| Gap, percentage points | 2.0 | 1.7 |
GCC average inflation and world headline inflation from the Regional Economic Outlook, October 2026; the gap is our calculation.
The inflation chapter finds that GCC economies tend to see smaller pass-through from global supply shocks, as energy subsidies and fixed exchange rates provide some insulation. Stronger central bank independence goes with more contained inflation, less policy tightening and smaller output losses. Where public debt is high, headline inflation rises four times more than in low-debt economies. Oil consumption subsidies cut the inflationary impact of the regional oil price surge in 2026 by an estimated 0.4 percentage point, at an estimated fiscal cost of 0.5 percent of GDP, by the Fund’s estimate. Energy subsidy reforms in Bahrain, Egypt and the UAE in recent years have reduced vulnerabilities and created more policy room, the report says.
The trade chapter finds that economies with more diversified trade absorb shocks better and recover faster. The gain is greatest when structural reforms support it. Industrial policies that do not address market failures can cost efficiency, the chapter adds. In 2025, Qatar, Saudi Arabia and the UAE announced AI-related investments exceeding 5 percent of GDP, an estimated 120 billion dollars by the Fund’s count, mostly in data centres and AI infrastructure. AI adoption could add an estimated 0.1 to 0.6 percentage point a year to growth across the region and the Caucasus and Central Asia over the medium term, in the Fund’s analysis.
Why it matters: The report splits the region into two groups this year, and Oman and Egypt sit on the growing side. For the Gulf’s large producers, the test is 2027. The Fund sees GCC growth of 9.1 percent that year, with inflation at 2.4 percent.
Outlook: The milestone for the Gulf rebound is the end of the first quarter of 2027. After that, the Fund assumes flows through the Strait of Hormuz recover gradually. It projects the GCC current account to rebound strongly in 2027 and 2028. Further out, the Fund sees the region’s oil importers, Egypt among them, growing 4.5 percent in 2031.
Sources: International Monetary Fund, The Edge.
