The economies of Gulf countries are facing serious challenges due to the continuation of the war against Iran and tensions in Yemen. This situation has not only disrupted trade activities but also threatens regional plans for tourism development, technology, and reducing dependence on oil revenues.
Projected Decline in Economic Growth
According to the International Monetary Fund's forecast, the economies of the Gulf Cooperation Council member countries will face a 5% decline this year. In Kuwait, Bahrain, and Qatar, which are more dependent on energy exports through the Strait of Hormuz, this decline will exceed 10%. In Saudi Arabia, the government has reported a contraction of 3.8% in the economy in the third quarter of this year compared to the same period last year. This decline is primarily due to a 20.4% drop in oil activities.
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Disruption in Transportation and Investment
Severe disruptions in air transportation and investment are also other negative consequences of this situation. For example, the airline "Riyadh Air" has been forced to transport international passengers by bus from the alternative airport. Additionally, the Saudi investment conference has been postponed to next year. Moreover, some international airlines have suspended their flights to this region. In Abu Dhabi, the CEO of ExxonMobil has refrained from attending the "ADIPEC" energy conference due to security concerns.
Efforts to Create Alternative Export Routes
Currently, pipelines that do not pass through the Strait of Hormuz have helped Saudi Arabia and the UAE continue their oil exports. However, prolonging the conflicts may force regional governments to allocate more financial resources to create alternative export routes and increase military expenditures. The UAE is also aiming to eliminate its dependence on the Strait of Hormuz by increasing investment in alternative ports and pipelines.
Future Outlook and Economic Growth Forecast
While the International Monetary Fund has predicted that Oman will be the only economy in the region to grow by more than 4% this year, rising oil prices and the possibility of exports through the Arabian Sea without reliance on the Strait of Hormuz are factors contributing to this growth. Additionally, the war has harmed artificial intelligence projects in the region, and discussions about decentralizing new data centers have emerged. This institution has also emphasized that if the conflicts gradually subside and energy sector activities return to pre-war levels, a growth of 7.9% in Saudi Arabia and 18.8% in Qatar by 2027 will be possible.
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