Gulf economies rebounded in July, as firms dig out from wartime lows
Renewed strikes and slower traffic through the Strait of Hormuz later in July may undermine the chances of a sustained rebound.
In July, non-oil business activity in some of the Gulf's largest economies showed signs of recovery, according to S&P Global's latest surveys. As hostilities subsided at the beginning of the month, firms demonstrated a swift recovery in output, including new orders, purchasing, and hiring. However, the likelihood of a sustained rebound into August could be impacted by renewed Iranian and US strikes, as well as slower traffic through the Strait of Hormuz, according to S&P.
Kuwait marked a significant milestone by returning to growth for the first time since the war commenced. The UAE, which had hit a five-year low in June, rebounded due to renewed export demand and a resurgence in hiring. Saudi Arabia achieved a fourth consecutive month of business expansion, despite a decline in confidence stemming from rising costs. In contrast, Qatar continued to experience contraction, albeit with indications that the war's impact was beginning to wane.
Despite these mixed developments, all four Gulf economies remain below pre-war levels, grappling with delivery delays, rising costs, and softer export demand. Only a small fraction of firms in the UAE (7%) and Saudi Arabia (8%) anticipate growth over the next year, as reported by S&P Global.
Written by urgent.news from Semafor's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
