• AGBI reports the IMF expects GCC growth to stay below pre-war levels until the end of the decade.
• The IMF's April 2026 outlook, as summarised by Khaleej Times, put Saudi Arabia and the UAE at 3.1% growth for 2026 and Oman at about 3.5%.
• The same April summary showed Kuwait, Bahrain and Qatar contracting, with Qatar's 8.6% fall the steepest at a 14.7-point downgrade.
• Khaleej Times attributes the April downgrades to the US-Iran conflict and Strait of Hormuz disruption.
• Neither source reports market data, so the effect on Gulf equity valuations is not measured and nothing here is a trade view.

The IMF has warned that the six Gulf Cooperation Council economies, Bahrain, Kuwait, Qatar, Oman, Saudi Arabia and the UAE, will be scarred by regional conflict, with growth likely to stay below pre-war levels until the end of the decade, AGBI reported in October 2026. The warning follows an April downgrade that already split the bloc sharply by country.

What the IMF is signalling

The IMF's message, as AGBI reports it, is about duration: Gulf economies are expected to be scarred by regional conflict, with growth remaining below pre-war levels through to the end of the decade. That is a claim about the path, not about one weak year. AGBI's summary gives no country-level numbers, so the size of the gap is not established here, and this piece keeps what is reported separate from what is inferred.

The April baseline across the six members

The IMF's April 2026 World Economic Outlook, as summarised by Khaleej Times on 16 April 2026, already showed sharp divergence. It put Saudi Arabia and the UAE at 3.1% growth for 2026 and Oman at about 3.5%, while Kuwait, Bahrain and Qatar were in contraction at about 0.6%, 0.5% and 8.6%. Khaleej Times attributes the downgrades to the US-Iran conflict and Strait of Hormuz disruption. These are April figures, not the October release.

Why exposure appears to drive the split

Khaleej Times reports that Saudi Arabia's downgrade was cushioned by redirecting crude exports through Red Sea pipeline routes, while Qatar, facing trade-flow and energy-logistics pressure, took the steepest cut at 14.7 points. The pattern suggests that export-route exposure explains more of the spread than the regional label does. Economists quoted in that report describe Qatar's pressure as temporary, a view the October warning of lasting scarring now tests.

What it means for Gulf equities and flows

A lower multi-year growth baseline bears first on earnings expectations, listing pipelines and sovereign-fund allocation, because sovereign and institutional investors allocating across the six markets read the same country divergence. Neither source reports market data, so the effect on the Tadawul, DFM or ADX is not measured here. Whether prices already reflect the slower path is an open valuation question, and nothing in this piece is a recommendation on any security.

What to watch next

Three markers will show whether the scarring thesis holds: the status of Hormuz shipping, the IMF's country-level figures behind the October warning once they can be read against the April baseline, and the pace of listings and fund deployment on Gulf exchanges. Faster normalisation of trade routes would narrow the gap the Fund describes, while persistent disruption would widen it, with the burden unlikely to fall evenly across the six members.