Gulf economies may face worst downturn since the 1990s due to Iran conflict — Goldman Sachs
The economies of Gulf countries could face their most severe downturn in decades due to the escalating conflict around Iran. According to analysts at Goldman Sachs, the negative scenario could occur if the conflict disrupts shipping through the Strait of Hormuz.
The bank estimates that if the war continues until April and shipping through the strait is halted for two months, Qatar and Kuwait’s GDP could decline by about 14% in 2024. The Strait of Hormuz is a critical route for global energy exports, making any disruption highly significant for the region’s economies.
Meanwhile, Saudi Arabia and the United Arab Emirates are considered to be in a relatively stronger position. Both countries can partially reroute oil shipments through alternative infrastructure, which could limit the expected GDP contraction to around 3% for Saudi Arabia and 5% for the UAE.
Analysts note that the situation highlights the strong dependence of Gulf economies on geopolitical stability and secure maritime trade routes. In the long term, it may encourage regional governments to accelerate economic diversification and reduce reliance on energy exports.
