Middle East geopolitical developments and economic impact

Economic Bulletin

Week of 1 April 2026

The ongoing geopolitical circumstance in the Middle East continues to exert profound and broad impacts on the global economy, extending well beyond the energy sector. With uncertainty prevailing over the conflict’s duration and trajectory, global markets and economies are facing mounting challenges, particularly in developing regions heavily reliant on energy imports.

Authors:

Rohan Sawhney

Ruth Steen

Economic Bulletin | Week of 1 April 2026

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Regional Adaptation and Resilience

Strategic Shifts: Regional economies are adapting swiftly, exemplified by Saudi Arabia’s pivot to land-based oil export pipelines and the launch of new international logistics corridors enhancing trade resilience.
Support Measures: Authorities in Dubai and Qatar have introduced emergency liquidity and business support packages to stabilise their economies.

The Middle East geopolitical conflict presents a complex challenge with far-reaching economic consequences. While some regions and sectors demonstrate resilience and adaptability, global inflationary pressures, market volatility, and supply chain disruptions underscore the uncertainty ahead. Continuous monitoring and strategic responses remain critical as the situation develops.

Global economic impact

Broadening Economic Strain

The conflict has intensified economic pressures worldwide, with developing economies in Asia, Africa, and the Middle East most vulnerable due to their dependence on imported energy and limited fiscal buffers.

Growth Outlook Revisions

Leading institutions like Fitch have revised global GDP growth projections downward by up to 0.8 percentage points, while the OECD warns of further downside risks if high energy prices persist.

Inflationary Pressures

Inflation rates are rising globally, with the OECD forecasting G20 inflation at 4% for 2026. The US faces potential inflation surges above 4.2%, influencing investor behaviour and borrowing costs.

Key economic indicators

Air Traffic

Major Gulf airports experienced sharp declines in activity post-escalation, with Riyadh experiencing a smaller decline compared to its peers.

Maritime Shipping

Ship arrivals in the Strait of Hormuz plummeted by over 97%, highlighting severe disruptions to global shipping lanes.

Financial Markets

While the GCC, markets are experiencing varying degrees of decline, with some showing more resilience than others.

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Middle East geopolitical developments and economic impact

Economic Bulletin