JPMorgan has pared back its projections for non-oil economic expansion across Gulf economies this year after the Iran conflict widened over the weekend, warning that further revisions remain possible depending on how the situation unfolds.
The Wall Street firm lowered its non-oil growth forecast by 0.3 percentage points across the Gulf Cooperation Council (GCC). Among member states, Bahrain and the United Arab Emirates registered the largest reductions, with cuts of 0.5 percentage points and 0.4 percentage points, respectively.
The bank highlighted elevated uncertainty tied to the conflict and its potential spillovers for regional activity. "Risks are elevated across multiple fronts and will depend heavily on the conflict’s outcomes," JPMorgan analysts said, underscoring that the outlook could change further as events develop.
Beyond the Gulf, JPMorgan adjusted its expectations for monetary policy in other regional economies affected by geopolitical volatility. The bank no longer anticipates a policy rate cut from Turkey’s central bank at its March 12 meeting. It also lifted its forecast for Turkey’s year-end 2026 policy rate to 31% from a prior 30% and raised its projection for inflation at that point to 25% instead of 24%.
With direct involvement by Israel in the current conflict, the bank said it was likely that the Bank of Israel - referred to as the BOI - would also refrain from cutting rates in March. The firm framed these shifts as responses to heightened geopolitical risk rather than changes driven by domestic economic indicators alone.
JPMorgan warned that the combination of conflict-related uncertainty and central bank responses could continue to alter growth and inflation profiles in the region, and that further forecast revisions remained a possibility as the situation evolved.