Mecon | June 2026 Edition
This report provides June 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. This month’s edition includes a topical spotlight on early signs of economic normalisation across the GCC following the US–Iran de-escalation framework agreement, including improving energy flows, recovering shipping activity, easing travel restrictions, and renewed optimism across tourism, aviation, and investment
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Saudi Arabia
Real GDP grew 3.0% YoY in Q1 2026 to SAR 1.2 Tn, the slowest expansion since Q2 2024 amid softer oil and non-oil momentum. The IMF revised its 2026 growth forecast to 2%, contingent on normalised shipping through the Strait of Hormuz, and reiterated the need for fiscal consolidation and diversification. Meanwhile, the World Bank Enterprise Survey 2025 highlighted limited access to finance, especially for smaller firms, as a key competitiveness constraint, reinforcing the importance of reforms to deepen liquidity and broaden funding access in line with Vision 2030.
UAE
The UAE continues to advance its long-term economic transformation despite moderating near-term conditions, supported by ongoing industrial development, fiscal modernisation, and AI initiatives. Investment momentum remains positive, with Dubai retaining its position as the world’s leading destination for greenfield FDI for the fifth consecutive year. However, hiring intentions weakened heading into Q3 2026 as regional tensions weighed on confidence, making upcoming labour and activity indicators key to assessing whether the moderation is temporary or sustained.
Qatar
Qatar’s non-energy PMI and inbound tourism arrivals remained in contraction in May 2026, reflecting the ongoing impact of the conflict, though the downturn was less severe than in March. Qatar ranked first in the GCC and among the top five globally for economic resilience in the 2026 IMD World Competitiveness Yearbook. Qatar is also restarting LNG operations and recalling tankers in the Strait of Hormuz; given its reliance on safe passage for exports, geopolitical developments remain critical, though the gradual resumption should support near-term fiscal and trade balances.
