Capital Economics assistant economist Nicolas Crittenden said a new round of
Iranian strikes could derail an initial Gulf region economic recovery. The
escalation risks reversing gains after last month’s US‑Iran ceasefire eased
disruptions to regional trade and energy supplies. June private‑sector activity
improved across the Gulf, led by Saudi Arabia; exports from key trading partners
rose and flight volumes recovered to near pre‑conflict levels, signaling a
rebound in tourism and logistics. Renewed disruption to traffic through the
Strait of Hormuz could stall the recovery, and downside risks are mounting
against Capital Economics’ forecast of roughly a 6% GDP contraction in the Gulf
this year.
