Middle East Conflict Further Weakens Regional Outlook, with Gulf Oil Exporters Hit Hardest (+... +... +...)

Middle East Conflict Further Weakens Regional Outlook, with Gulf Oil Exporters Hit Hardest Longer term, artificial intelligence has the potential to boost regional productivity and growth, but structural gaps must be closed WASHINGTON, October 6, 2026 — The conflict that began in February 2026 continues to impose serious economic costs across the Middle East, North Africa, Afghanistan, and Pakistan (MENAAP), according to the World Bank Group’s latest economic update for the region. Unlike previous energy shocks, which typically benefited oil exporters, the closure of the Strait of Hormuz has imposed the largest costs on oil-exporting Gulf countries. https://www.worldbank.org/en/news/press-release/2026/10/06/middle-east-conflict-further-weakens-regional-outlook-with-gulf-oil-exporters-hit From Divide to Opportunity: AI, Jobs, and Growth The Middle East, North Africa, Afghanistan, and Pakistan (MENAAP) region is facing severe economic costs due to the conflict that began in February 2026. Unlike previous energy shocks, which typically benefited oil exporters, the closure of the Strait of Hormuz has imposed the largest costs on Gulf oil-exporting economies. Regional output is projected to contract by 2.1% on average in 2026, after expanding by 3.3% in 2025. The effects extend well beyond energy markets, disrupting tourism, aviation, and logistics, while heightened uncertainty continues to weigh on financial markets and business sentiment. As policymakers confront the immediate consequences of conflict and economic disruption, the region must also prepare for a second transformation that is unfolding: the rise of artificial intelligence (AI). The region is experiencing not one, but several transformations unfolding at different speeds. In most economies, AI’s near-term impact is likely to come primarily through productivity enhancement rather than widespread job displacement. The new report, From Divide to Opportunity: AI, Jobs, and Growth, examines how AI can support productivity and growth across the region, and identifies the key structural gaps that must be addressed to ensure that its benefits are widely shared. https://www.worldbank.org/en/region/mena/publication/middle-east-north-africa-afghanistan-and-pakistan-economic-update Report Launch: Economic Growth and AI's Uneven Promise in the MENA, Afghanistan, & Pakistan Region The conflict in the Middle East is imposing major costs on the economies of the region. Live event will discuss the new Economic Update for MENA, Afghanistan, & Pakistan https://www.worldbank.org/en/events/2026/10/08/report-launch-economic-growth-and-ai-uneven-promise-for-mena-afghanistan-pakistan