Allianz chief economist Ludovic Subran warns that regional conflict is increasing GCC fiscal pressures, urging Gulf economies to attract international capital and sustain investment…reports Asian Lite News Desk
The Gulf Cooperation Council (GCC) economies are losing the equivalent of one percentage point of gross domestic product in deficit for every month of regional conflict, according to Allianz chief economist Ludovic Subran, who has urged governments to tap international capital markets to sustain investment and economic growth.
Speaking at the Rise summit at Dubai World Trade Centre, Subran said the Gulf had demonstrated resilience during the prolonged crisis but would need to secure financing and maintain investor confidence to navigate the economic fallout.
According to Khaleej Times report, Subran praised the region’s response to the conflict, which he said had highlighted the strength of its people and institutions.
“I’m here to show that this region has actually already, seven months into the conflict, shown that they are resilient,” Subran said. “It’s not how high the buildings are, it’s how resilient the people are.”
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The economist said international investors were looking for clear economic strategies, commercially viable projects and partners willing to invest alongside them. Long-term development programmes, including national visions aimed at diversifying economies, could help provide that direction.
He argued that the Gulf should use international markets to finance development rather than allowing the conflict’s economic costs to undermine longer-term ambitions.
Global trade weakens as AI investment drives growth
Subran also warned that global trade was struggling, with artificial intelligence investment masking weakness in other sectors.
He said global trade growth was expected to reach around 1 per cent this year, but would be approximately 4 per cent lower without AI-related exports of goods and services.
The figures illustrated the growing influence of investment in data centres and AI infrastructure on the global economy, particularly in the United States.
However, Subran said the AI investment cycle was not necessarily nearing its end. He estimated that the current capital expenditure boom had lasted about 80 quarters, compared with historical technology investment cycles of roughly 24 quarters.
That suggested there could still be room for further investment, although the concentration of economic growth in one sector also raises questions about the sustainability of the wider expansion.
