Unless Iran makes major concessions to reach a new nuclear deal with the US, the threat of US military intervention will rise - particularly given the build-up of forces in the region. Elsewhere, Kuwait's FY2026-27 Budget reaffirmed that the government is adopting a looser fiscal stance. Saudi inflation data were also published this week and the disinflationary trend is likely to persist this year on the back of a cooling rental market and easing global food prices. Finally, we updated our proprietary AI Economic Impact Index. The Gulf's dealmaking will give it a strong position in data centre development, but the region's ability to innovate or adapt to the technology may be more constrained.
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