IMF’s Georgieva Calls GCC Resilience “the Dividend of Reforms” and Sees a Strong 2027 Recovery if Shipping Normalises
The energy supply shock has been contained, in no small part thanks to the Gulf Cooperation Council’s decisive response, IMF Managing Director Kristalina Georgieva told GCC finance ministers and central bank governors in Manama on Thursday, adding that “resilience is no accident” and “it is the dividend of reforms you have championed.” She credited strong fundamentals, ample fiscal and external buffers, credible policy frameworks, exchange rate pegs and well capitalised, liquid banking systems.
Rerouting kept energy flowing
Georgieva said GCC governments moved quickly to reroute critical supplies away from the Strait of Hormuz, keeping energy flowing to world markets, and acted to ease shipping bottlenecks, support households and firms, provide liquidity to banks and coordinate regional logistics and trade. She said the economic impact has nonetheless been significant, reversing the region’s growth momentum.
A 2027 rebound if shipping normalises
Georgieva said the GCC economy is expected to contract in 2026 on a sharp drop in hydrocarbon production and slower non-hydrocarbon growth and, conditional on a gradual normalisation of shipping, to recover strongly in 2027.
| Policy area | IMF message |
|---|---|
| Fiscal policy | Temporary, targeted and transparent support with a clear sunset |
| Trade resilience | Storage, inventories, and completing the GCC Railway and the Saudi Landbridge |
| Diversification | Larger private sector role, skills, digitalisation and AI |
| Digital assets | On-chain activity up from $6 billion in 2020 to $92 billion in 2024 |
From the Managing Director’s remarks; no growth figures were given.
Completing the GCC Railway and the Saudi Landbridge would substantially reduce economic losses from a closure of the Strait, and estimates suggest these routes could raise GCC output even when it is open, she said. On-chain activity in the region is estimated to have grown roughly fifteen fold over four years, on our calculation. GCC Secretary-General Jasem Albudaiwi said the IMF commended the bloc’s resilience, and attributed its macroeconomic strength to disciplined policies, robust financial buffers, resilient banking sectors and sustained investment in diversification.
Why it matters: Georgieva credits swift Gulf rerouting with averting a far bigger shock to the global economy, and sees a strong recovery in 2027 if shipping gradually normalises.
Outlook: A strong GCC recovery is in view for 2027 if shipping gradually normalises, though Georgieva said uncertainty remains high and more persistent or severe disruptions could delay it.
Sources: International Monetary Fund, Saudi Press Agency, The Edge.
