Gulf Economies, Torn by War in Iran, Desperately Need a Return to Normal
Gulf Cooperation Council economies are under substantial strain following the start of the US and Israel war on Iran in February. The World Bank downgraded the region's 2026 GDP growth forecast from 4.4% to 1.3%. While the region has endured eight months of conflict with fewer visible scars than some analysts predicted in March, foreign investors are exiting Persian Gulf stock markets and energy supplies have been disrupted. The impact varies across the bloc, revealing differing levels of economic resilience among members like Saudi Arabia and the UAE.
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- ✓ The US and Israel war on Iran began in February.
- ✓ The World Bank lowered its 2026 GDP growth forecast for the GCC region from 4.4% to 1.3%.
- ✓ The Gulf Cooperation Council includes Bahrain, Kuwait, Oman, Qatar, the UAE, and Saudi Arabia.
What changed
World Bank GDP forecasts for 2026 have been slashed to 1.3% due to the conflict.
Live updates
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War with Iran Strains Gulf Economies and Growth Forecasts
Gulf Cooperation Council economies are under substantial strain following the start of the US and Israel war on Iran in February. The World Bank downgraded the region's 2026 GDP growth forecast from 4.4% to 1.3%. While the region has endured eight months of conflict with fewer visible scars than some analysts predicted in March, foreign investors are exiting Persian Gulf stock markets and energy supplies have been disrupted. The impact varies across the bloc, revealing differing levels of economic resilience among members like Saudi Arabia and the UAE.
Why it matters
The GCC consists of Bahrain, Kuwait, Oman, Qatar, the UAE, and Saudi Arabia. These nations share a dependence on hydrocarbons, making the stability of the Strait of Hormuz critical for global fuel shipments. The ongoing conflict forces these states to balance security partnerships and economic diversification.
What is confirmed
- The US and Israel war on Iran began in February.
- The World Bank lowered its 2026 GDP growth forecast for the GCC region from 4.4% to 1.3%.
- The Gulf Cooperation Council includes Bahrain, Kuwait, Oman, Qatar, the UAE, and Saudi Arabia.
Still unconfirmed
- The US-Iran security crisis disrupted Gulf energy supplies.
What to watch next
- Updated GDP growth data for the second half of 2026
- Reports on the volume of crude and fuel shipments through the Strait of Hormuz
- Changes in startup investment funding levels within the Gulf
confidence 80%Sources used for this update (16)
- www.nytimes.com — The New York Times - Breaking News, US News, World News and Videos
- businessdailymedia.com — How severe has the economic impact of the Iran war been for ...
- www.americanthinker.com — VDH Is Not Optimistic About Europe...Or America
- www.deccanherald.com — Apple unveils A20 Pro-powered iPad mini with OLED screen; check key features, price and India availability details
- www.faf.ae — Gulf Under Siege: Why the Persian Gulf Cannot Survive a ...
- The New York Times — Gulf Economies, Torn by War in Iran, Desperately Need a Return to Normal
- The Washington Post — Resilience: The Region’s Best Defense in a War Without End
- Global Finance Magazine — Gulf States Prove Resilient in the Face of US-Iran Conflict
- entARABI — The Iranian-US War and Its Impact on Startup Investments in the Gulf: Where Are Funding Billions Going?
- ABNA English — War against Iran drives foreign investors out of Persian Gulf stock markets
- ORF Middle East — Beyond Washington: Gulf Partnerships Under Review
- NPR — Gulf Arab states struggle under the cloud of war
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