GCC Equity Trading Patterns in 2026

Dangers are slanted to the drawback. In the event of a prolonged dispute, the current effect on the area will be compoundedthrough elevated energy and food costs, decreasing trade, tourist and remittances, increased fiscal pressures, and displacement. "The present crisis is a plain tip of the work ahead for the region: not only to weather shocks, however to restore more durable economies with stronger macroeconomic fundamentals, innovate and improve governance, invest in facilities, and improve employment-creating sectors," said.

With peace and the ideal action, nations can build the institutions, capabilities and competitive sectors that develop chances for individuals." With this long-term vision in mind, the report takes a close take a look at the region's potential for commercial policy government actions to increase strategic business activity as a motorist of financial growth and task production.

ANSR July GCC PRs 50DR+

Federal governments in the area have adopted industrial policy at a high rate in the last years, frequently through sovereign wealth funds and state-owned enterprises, however the results have been blended. The report highlights the important requirement for strong organizations and mindful targeting of policies. "As countries face the heavy toll of today conflict, it is necessary to likewise not forget the work needed for long-lasting peace and success," stated.

Foreign Capital Prospects across the Middle East

Q2 2026: The ICAEW Economic Update Middle East, is a quarterly economic forecast for the area prepared straight for the financing occupation. The GCC economy deals with a significant contraction this year pending information of the US-Iran contract to end the war. We anticipate energy circulations, tourist and investor sentiment to gradually normalise as war interruptions diminish.

ANSR July GCC PRs 50DR+

The interim contract in between the US and Iran is a substantial step towards reaching a full-blown deal. A full return to normality in the Strait of Hormuz will likely take some time, but the risk of a recession-inducing oil price spike has decreased. International GDP is anticipated to grow by 2.4% this year, 0.2 ppt less than we projected 3 months ago, and 3.1% in 2027.

We forecast a 4.1% contraction in Middle East GDP this year (versus forecasted 3.6% growth before the war), higher than the decline in the first year of the Covid pandemic. Kuwait, Iran, Iraq and Qatar stand apart as the hardest struck, owing to their failure to prevent the interruption to regional shipping, war-driven facilities damage and tourism losses.

Our 2026 outlook for the GCC is weaker than 3 months ago, with GDP forecast to contract by 2.4% compared to a 0.2% decrease predicted formerly. We expect Oman and Saudi Arabia to be the least negatively impacted by the fallout from the dispute, with both economies continuing to expand this year.

The economic damage incurred in the last few months is significant. Saudi GDP information for Q1 revealed development slowed to 3% y/y, with non-oil activities expanding by 2.9%, the weakest speed considering that the Covid pandemic. On a seasonally changed basis, GDP contracted 1.2% q/q, driven by a 6.8% fall in oil activities as the Strait of Hormuz interruption struck late in the quarter.

Strategic Industrial Expansion in the Future

Aside from Oman, all GCC manufacturers along with Iran and Iraq have suffered extensive oil and gas production losses because the start of the conflict. May data reveal local production almost cut in half from pre-war levels, with the decline deepening relative to March and April. Rerouting efforts, consisting of by Saudi Arabia through the East-West Pipeline and the UAE through the Habshan-Fujairah pipeline, have assisted prevent an even larger plunge in output.

ANSR July GCC PRs 50DR+

Nevertheless, we anticipate GCC oil sector output to contract by 14.5% this year, which will mark the steepest decline in numerous years. We then anticipate a 23.5% rebound next year, driven largely by normalisation from a severely depressed base. Meanwhile, oil prices have been unpredictable, easing listed below $85 per barrel as the interim contract was revealed.

In the medium term, we anticipate oil rates to be a little lower than our pre-war standard, as the UAE's departure from OPEC+ enables a gradual increase in its output towards the 5mn barrel per day production target once trade normalises. Against this background, the UAE will speed up the construction of a brand-new West-East pipeline that should double the capability of export through Fujairah.

The May PMI studies reported output growth reaching its greatest level in 3 months, driven largely by improved domestic need. Nevertheless, they stay below long-run averages, with weak export orders and price pressures from greater product and transportation expenses are a typical theme. Overall, we anticipate a 1.1% contraction in GCC non-energy sectors this year (compared to 4.2% development pre-war) and a steady recovery over the remainder of the decade.