Gulf Continues to Attract Foreign Investment Despite Regional Conflict and Economic Uncertainty, Says GCC Secretary General

The GCC economic bloc remains a prime destination for investment despite ongoing risks such as war, shipping disruptions, and energy sector volatility, according to its secretary general, Jasem Al Budaiwi. Speaking at the AIM Congress 2026 in Dubai, Mr Al Budaiwi noted that while supply chains are being reshaped and emerging technologies redefine sectors, geopolitical factors increasingly dictate where investments flow.

“Opportunities no longer are sufficient to attract investment and, as variables and risks multiply, the strength of an economy, the strength of its institutions, the clarity of its directions and its ability to adapt to change become factors in guiding investment decisions,” Mr Al Budaiwi stated. These fundamental traits have anchored the economic development of the six-member Gulf bloc, allowing its states to maintain stability and market continuity despite regional turmoil.

The ongoing Iran war with the US and Israel has plunged the region into one of its deepest geopolitical crises in decades, severely impacting hospitality, aviation, and tourism as industrial, energy, and civilian infrastructure faced attacks. Despite mediated negotiations, a peace deal or a mechanism to reopen the crucial Strait of Hormuz has not been reached, leaving the vital trade route effectively shut and creating volatility in global energy markets. Nonetheless, the International Monetary Fund reports that Gulf economies have sustained growth momentum, albeit at a slower pace.

Mr Al Budaiwi highlighted that the Gulf operates as an integrated and interconnected economic and investment system rather than six separate markets. The region's economy ranks among the world's 10 largest, boasting a combined GDP of $2.4 trillion, sovereign wealth fund assets exceeding $5 trillion, and commercial banking sector assets growing to $3.9 trillion in 2025.

Total foreign direct investment inflows into Gulf economies reached $792.7 billion last year, with intra-Gulf investments accounting for about 171.4 billion, or nearly 22 percent of the total stock. Dr Thani Al Zeyoudi, the UAE Minister of Foreign Trade, also addressed delegates, emphasizing that the UAE has built an open partnership economy to navigate shifting global trade routes. According to UN Conference on Trade and Development reports, FDI into the UAE rose by about 6 percent to reach $48.24 billion in 2025, making it the ninth highest globally and the top recipient in the wider Middle East region ahead of Saudi Arabia.