Capita Economics: Gulf Recovery Faces New Setback as Iran Attacks Raise Downside Risks

According to Jin10, Capita Economics assistant economist Nicolas Crittenden said a new round of Iranian attacks could undermine the Gulf region's early economic recovery. He added that the latest escalation could reverse the improvement seen after last month's U.S.-Iran ceasefire eased disruptions to regional trade and energy supplies. Crittenden said private-sector activity across the Gulf improved in June, led by Saudi Arabia, while exports to the region from major trading partners also increased and flight numbers returned to near pre-conflict levels, signaling a recovery in tourism and logistics. He said renewed disruption to traffic through the Strait of Hormuz could stall the recovery, and downside risks are building around Capita Economics' forecast that Gulf GDP will shrink by about 6% this year.