Gulf states face investment downturn as Iran war disrupts markets and global capital flows
Gulf states are experiencing a significant investment downturn due to the ongoing Iran war, which has disrupted markets and capital flows. The World Bank has drastically reduced its growth forecast for the region, indicating potential recession risks. As a result, Gulf countries are shifting their focus from international investments to domestic defense spending.
- ▪The World Bank downgraded its 2026 GDP growth projection for the Gulf Cooperation Council from 4.4% to 1.3%.
- ▪Saudi Arabia's Public Investment Fund reduced its planned global asset allocation from 30% to 20% of its portfolio.
- ▪Gulf states are considering repatriating billions from US investments due to direct strikes on Gulf infrastructure.
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Gulf states face investment downturn as Iran war disrupts markets and global capital flows The GCC's pivot from global dealmaking to domestic defense spending is reshaping capital flows, with the World Bank slashing regional growth forecasts from 4.4% to 1.3%. Share Add us on Google by Editorial Team May. 27, 2026 window.sevioads = window.sevioads || []; var sevioads_preferences = []; sevioads_preferences[0] = {}; sevioads_preferences[0].zone = "01f21ccf-2092-46b1-9ac7-8c44cc782e0f"; sevioads_preferences[0].adType = "native"; sevioads_preferences[0].inventoryId = "c5700508-581b-472c-8fdd-a931cdbfc8e1"; sevioads_preferences[0].accountId = "1e47efc1-ec2d-4fca-a8b9-354e249e5095"; sevioads.push(sevioads_preferences); The Gulf Cooperation Council, long one of the world’s most reliable sources…
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