{"id":104766,"date":"2025-06-19T00:00:00","date_gmt":"2025-06-19T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/uae\/gcc-could-see-external-funding-outflows-due-to-the-israel-iran-conflict-but-the-uae-is-likely-to-weather-the-storm-sp-global\/"},"modified":"2025-06-19T00:00:00","modified_gmt":"2025-06-19T00:00:00","slug":"gcc-could-see-external-funding-outflows-due-to-the-israel-iran-conflict-but-the-uae-is-likely-to-weather-the-storm-sp-global","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/uae\/2025\/06\/19\/gcc-could-see-external-funding-outflows-due-to-the-israel-iran-conflict-but-the-uae-is-likely-to-weather-the-storm-sp-global\/","title":{"rendered":"GCC could see external funding outflows due to the Israel-Iran conflict, but the UAE is likely to weather the storm -S&P Global"},"content":{"rendered":"

S&P Glob<\/strong>al believes regional sovereigns and banks are in a good position <\/strong>to co<\/strong>pe with the Israel-Iran escalations<\/strong>, with the agency laying out different scenarios for the conflict and how it could affect different players in the region, it wrote in a note<\/a> on its website. <\/p>\n

S&P sees four primary risks affecting regional credit conditions: <\/strong>Regional sovereigns and lenders could be affected by issues that include \u201cbroader confidence factors\u201d \u2014 which could hamper economic growth, funding costs, and banking system liquidity and asset quality \u2014 as well as surges in the prices of energy, production, and transportation, weaker tourism and capital outflows, and other security-related expenditure, the agency wrote.<\/span><\/p>\n

Outflows can be severe for the region:<\/strong> External funding outflows are expected to reach around USD 240 bn \u2014 equivalent to \u201cabout 30% of the cumulative external liabilities of tested systems.\u201d However, S&P believes banks in the region have the necessary external liquidity to cover these outflows in most cases, provided their external assets can be liquidated.<\/p>\n

The UAE is among the most likely to weather the outflow storm:<\/strong> UAE banks have the strongest net external asset position in the region at large, which makes them the most resilient in the face of potential capital outflows. However, escalatory attacks between Israel and Iran are expected to affect business confidence in the GCC region at large, according to S&P. <\/p>\n

Key risks for GCC banking systems include:<\/strong><\/p>\n