GCC Fiscal Resilience and Macroeconomic Stability During the Iran War

Why It Matters

GCC stability matters for global energy supplies, trade routes and emerging-market finance; failure to act could prolong commodity shocks and ripple through global inflation and supply chains. Prompt policy intervention will be critical to prevent sustained economic damage and preserve investor confidence.

Summary

Speakers at the Atlantic Council MENA Futures Lab webinar warned that the Iran war is imposing multi-channel macroeconomic shocks on GCC economies, chiefly via disrupted trade and logistics from Strait of Hormuz closures, higher freight and insurance costs, and interrupted imports and exports. Panelists said impacts will vary by country depending on geography, fiscal and sovereign-wealth buffers and debt levels, with Bahrain and some smaller Gulf states most exposed while Qatar, Kuwait and the UAE are better positioned. The shock transmits through tighter financial conditions, input-cost volatility, delayed investment and weaker non-oil growth, and could raise inflation, fiscal strain and capital-flow volatility if not addressed. Experts stressed the disruption is policy-manageable but requires early, targeted monetary, fiscal and liquidity measures to blunt systemic spillovers.

Original Description

This session examines the macroeconomic implications of the ongoing Middle East conflict for the economies of the Gulf Cooperation Council.