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How severe has the economic impact of the Iran war been for the Gulf states?

By Emilie Rutledge, Senior Lecturer in Economics, The Open University

The US and Israel’s war on Iran has cast a long shadow over the Gulf. It has placed many of the economies that make up the Gulf Cooperation Council (GCC) regional grouping – Bahrain, Kuwait, Oman, Qatar, the United Arab Emirates (UAE) and Saudi Arabia – under substantial strain.

Since the war began in February, the World Bank has downgraded its 2026 GDP growth forecast for the region from 4.4% to just 1.3%. Some…

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