MEcon | July 2026 Edition
This report provides July updates and analysis on key topics and regional insights across the Middle East, with a focus on Saudi Arabia, the United Arab Emirates, and Qatar.
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Saudi Arabia
Real GDP is estimated to have contracted by 4.8% YoY in Q2 2026, as disruption to crude exports during the regional conflict drove a sharp fall in oil activity, outweighing continued growth in non-oil and government activity. Even so, Fitch and the IMF reaffirmed confidence in the Kingdom’s resilience and medium-term outlook. KSA’s 2026 Voluntary National Review also signals a clear shift in the development narrative: Vision 2030 enters its final phase, the focus is moving from the scale of transformation to its quality, resilience, and inclusiveness.
UAE
The UAE economy remains in expansion, although recent indicators point to a broad slowdown, with the non-oil PMI falling to 50.8 in June from 52.6 in May, its weakest reading since February 2021. The UAE Central Bank has downgraded its 2026 growth forecast as the economy adjusts to regional tensions, but still expects a recovery in 2027, with renewed escalation the main downside risk. The medium-term outlook remains supported by strong FDI and major infrastructure, energy, and aviation projects, even as firms grow more cautious on hiring.
Qatar
Qatar’s non-hydrocarbon economy is sending mixed signals, with PMI data showing the slowest deterioration in business conditions since the regional conflict began. At the same time, new polls now forecast an 8.1% contraction in 2026, versus 6.0% in April, as disruption around the Strait of Hormuz continues to constrain energy exports, before a projected 7.8% rebound in 2027. Prolonged maritime disruption is also strengthening LNG buyers’ bargaining power, with growing demands for lower prices, shorter contracts, supply guarantees, and greater resale flexibility.
