Gulf states curb overseas investments and tap sovereign funds as war slashes revenues

Since the war started in February, foreign capital into the Gulf Cooperation Council has dropped as much as 67%, forcing member states to rethink both outbound investments and domestic budgets. Kuwait announced borrowing from its trillion-dollar Future Generations Fund, and Saudi Arabia is pursuing up to $8 bn in loans through its debt-management centre. The revenue squeeze is driving focus toward resilient infrastructure, notably a second pipeline to Fujairah built by Abu Dhabi National Oil Company to circumvent Hormuz.

Diversification efforts in tourism, heavy manufacturing and digital sectors have been hit, with sharp declines in hotel and airline revenues and disruptions to aluminium processing plants. Nevertheless, Gulf investors have completed major transactions, such as a Saudi-led $55 bn acquisition of Electronic Arts and a $7 bn joint Saudi-France theme-park venture near Paris, underscoring the continued use of overseas deals for soft-power leverage despite tighter finances.