Poll most Gulf area economies face deeper downturns in 2026
Most Gulf economies will contract more sharply this year than expected three months ago before rebounding in 2027, a Reuters poll found, as crumbling hopes of a quick U.S.-Iran de-escalation keep the Strait of Hormuz – the region’s oil and gas export lifeline -largely closed.
The July -16 survey of economists was taken as many abandoned assumptions Gulf shipping and energy exports would quickly normalise. Trump’s latest blockade of Iranian shipping and repeated disruptions around Hormuz have lifted oil prices nearly 20 percent this month to about $85 a barrel.
For Gulf Cooperation Council producers, the shock is less about the price of oil than the ability to sell and ship it. Higher crude prices support revenues, but they are not fully offsetting lost export volumes, costlier freight and weaker investor confidence.
Kuwait and Qatar suffered the sharpest forecast downgrades, with both economies now expected to slump 8.1 percent this year, median forecasts showed, compared with contractions of 4.4 percent and 6.0 percent in a poll taken in April.
Oman forum adopts decision
The Oman Chamber of Commerce and Industry (OCCI) hosted a workshop to promote five priority joint-Gulf industrial investment opportunities to the region’s private sector, part of a wider drive to deepen industrial integration among GCC states and reduce the bloc’s reliance on imports.
The event, held on Wednesday, in cooperation with the General Secretariat of the Gulf Cooperation Council (GCC) and the Federation of GCC Chambers, implements a decision taken by GCC industry ministers in April approving the outcomes of a study that identified the five opportunities and mandated their promotion to Gulf businesses.
The five projects span industries described by organisers as strategically valuable: the manufacture of high-pressure seamless pipes for the oil and gas sector, single-use sterile surgical instruments, high-purity copper cathodes, silicon wafers for semiconductors and multi-parameter patient monitoring devices.
Experts pencil in contraction for GCC economies
Surprising exactly nobody, the region’s 2026 just got marked down again: Most GCC economies will contract more sharply this year than forecast three months ago before rebounding in 2027, according to a Reuters poll of economists out over the weekend, as hopes fade that the war will soon end.
Kuwait and Qatar took the deepest downgrades — the poll sees both economies shrinking 8.1 percent this year. The UAE will hold steady (-0.5 percent), respondents said, while Saudi (+1.4 percent) and Oman (+3.1 percent) will both eke out some growth. Bond investors understand the calculus: The average sovereign risk premium across Middle Eastern governments jumped roughly 20 bps to 402 bps over Treasuries in the week since the ceasefire broke down, Bloomberg reports — the widest in almost four years, and on pace for the fastest YTD widening since 2018.
China–GCC: relations in an emerging multipolar order
China–GCC Relations Have Become Structurally Embedded Across Multiple Sectors: China–GCC ties have matured into dense networks of multi-layered comprehensive cooperation. For the Gulf, China is a key partner in building post-hydrocarbon knowledge economies, advanced logistics corridors, and national industrial clusters. For China, GCC states are critical for energy diversification, secure maritime routes, Belt and Road expansion, and Global South diplomatic alignment.
Technology is Driving the Partnership’s Future Trajectory: While hydrocarbons remain essential, China–GCC technology ties are rapidly expanding. Chinese firms deliver integrated solutions that closely match Gulf diversification priorities. This deepening technological interdependence will be vital in the GCC’s modernization and economic transformation.
Sheikh approves national program
His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President, Prime Minister, and Ruler of Dubai, approved on Thursday the National Program for Developing the Statistics System in the UAE.
This strategic initiative embodies the UAE’s commitment to enhancing the quality of official economic statistics, keeping pace with the economy’s rapid transformations, and consolidating the UAE’s standing among the world’s leading economies.
The National Program for Developing the Statistics System includes setting 2024 as the unified base year for national accounts and reconstructing the time series for the GDP of the UAE for the period 2010–2026.
UAE economy set for rebound in second half of year
The UAE economy is set to rebound in the second half of this year despite the regional war, amid an exports recovery following its exit from Opec, the International Monetary Fund said on Friday.
The country has “demonstrated significant resilience” amid the conflict, the IMF’s mission chief to the UAE, Said Bakhache, said following a visit to Dubai this month.
“Sound fundamentals, ample policy buffers, advanced preparedness and a swift policy response have contained the overall impact of the shock,” he said.
Timely and well-targeted support measures also helped “preserve financial stability, safeguard essential supply chains, support affected sectors and households, and sustain market confidence”, he added.
IMF: targeted policy response keeps UAE economy resilient
The UAE economy has shown remarkable resilience to the conflict in the Middle East, supported by strong buffers, timely and well-targeted policy responses, including those by the government and the Central Bank Financial Institution Resilience Package, and the rerouting of oil and other trade flows, the International Monetary Fund (IMF) said following a recent visit to Dubai.
The fund said the UAE’s robust balance sheets across governments and government-related entities (GREs) have helped contain the economic impact, preserve financial stability, and sustain confidence.
It noted that fiscal and external balances are expected to remain in surplus, supported by higher oil prices, conservative budgeting, and sound policymaking, while low public debt levels preserve ample fiscal space.