In its June 2026 Global Economic Prospects report, the World Bank lowered its global growth forecast to 2.5 percent for 2026 — the weakest projection since the COVID-19 pandemic — and cut the MENAAP region's forecast to just 1.6 percent, down from 4 percent in 2025. The primary driver is the ongoing conflict triggered by U.S. and Israeli strikes on Iran in late February, which has caused the closure of the Strait of Hormuz, pushed Brent crude to a baseline assumption of $94 per barrel, and reignited inflationary pressure across global markets. The bank warns that if oil averages $115 per barrel, global growth could slow further to 2.1 percent; in a severe financial-market stress scenario, it could fall to 1.3 percent.
For the UAE specifically, the World Bank now projects 2.4 percent GDP growth in 2026, a significant revision from its January forecast of 5 percent. Saudi Arabia's forecast was similarly cut, from 4.3 percent to 3.1 percent. Despite these near-term headwinds, the report anticipates a regional rebound to 5 percent growth in 2027, contingent on energy disruptions easing by end of July 2026 — the bank's stated baseline assumption.
What this means for our clients
Founders evaluating a UAE structure right now are operating in a more uncertain macro environment than existed six months ago. Higher energy costs are feeding into global inflation, which typically keeps interest rates elevated and tightens credit conditions — factors that can affect banking relationships, investor appetite, and the cost of capital for early-stage businesses. Fertilizer price surges noted in the report also point to potential supply-chain volatility for companies with exposure to food or agriculture sectors.
That said, the UAE's fundamentals — diversified revenue base, strong FDI frameworks, and a domestic regulatory environment that has continued to evolve independently of regional conflict — mean the country remains a structurally distinct proposition from its neighbours. The 2.4 percent figure reflects a revised external outlook, not a deterioration in UAE policy conditions. Clients considering entity setup, residency, or banking should weigh these macro signals as context rather than a reason to pause — but they should plan with realistic timelines and conservative financial assumptions. We recommend reviewing the full World Bank report at the Economy Middle East source link, or booking a Sirius consultation to discuss how current conditions affect your specific structure.