Gulf Business Leaders Grapple with Economic Fallout from Iran Conflict

At a sparsely attended business conference in Dubai, Gulf executives offered unusually candid assessments of the region's economic challenges following Iran's military actions. While equity markets have largely recovered, economists expect only gradual growth rather than swift rebounds, with construction costs rising and lenders becoming more cautious. The conflict has prompted some UAE-based entrepreneurs to shift operations to Saudi Arabia, viewed as relatively safer, while international venture capitalists have largely withdrawn from the region citing unwillingness to engage with geopolitical risk. Iran's recent strike on Kuwait's international airport underscored that the ceasefire remains fragile, with one analyst noting that valuations have not yet fully adjusted to reflect the elevated risk premium. The broader challenge is that foreign investors often view the entire Gulf as a single market, meaning regional distinctions in safety and economic resilience may not translate into differentiated investment flows.