Overview:
Economic activity across the Arab region continues to diverge by sector and geography. Energy-dependent economies report robust export performance despite geopolitical disruptions to maritime shipping, while downstream sectors including financial services, logistics, and technology investments demonstrate sustained growth momentum. Inflation pressures have eased in several economies, though currency and credit conditions remain constrained by regional tensions and elevated global interest rates.
Details:
Jordan's inflation rate declined to 2.7 percent in July, down from 2.79 percent in June, driven primarily by lower food prices. This moderation reflects improving price stability despite ongoing regional economic headwinds. Simultaneously, deposit growth in Jordanian banks has accelerated, partially offsetting subdued lending activity constrained by elevated interest rates and regional geopolitical factors. Credit expansion remains restricted at approximately 3 percent year-over-year.
Iraq achieved a historic export milestone, shipping 2.8 million barrels of oil daily for the first time since the onset of disruptions in the Strait of Hormuz region. This performance underscores resilience in hydrocarbon production despite maritime navigation challenges. International crude benchmarks reflected these supply pressures, with Brent crude reaching USD 88.52 per barrel as shipping bottlenecks persisted across regional waterways.
Beyond traditional energy sectors, diversification efforts accelerated. Egypt recorded record chemical and fertilizer exports valued at approximately USD 6.1 billion in the first half of 2026. The United Arab Emirates expanded its non-oil trade network to 38 comprehensive economic partnership agreements spanning Asia, Africa, and Europe. Additionally, Abu Dhabi Ports achieved its strongest quarterly results on record in the second quarter of 2026, with revenue rising 47 percent year-over-year and net profit increasing 88 percent.
Corporate capital allocation reflected confidence in growth prospects. Saudi Arabia's Public Investment Fund elevated its United States equities portfolio to USD 37.9 billion by mid-year. Emirati logistics startup Naran raised USD 10 million for expansion into African and Latin American markets. The Abu Dhabi Securities Exchange opened its data infrastructure directly to artificial intelligence platforms, advancing digital financial infrastructure capabilities.
Outlook:
Investors are monitoring whether Jordanian lending activity accelerates as regional stability conditions and interest rate environments evolve. Attention remains fixed on maritime security developments and their impact on Gulf oil export volumes and crude pricing through late 2026.