GCC Stock Market Patterns for 2026

Residential or commercial property costs have actually come under pressure after a duration of strong growth, with recent information from the Dubai Land Department revealing a drop in home mortgage transactions and cash sales. We believe the danger of a long lasting migrant outflow and an extreme downturn in the real estate sector is low.

As a long lasting US-Iran offer takes shape, the fallout from the dispute has actually tightened local financial conditions, exposing vulnerabilities through capital outflows, broader bond spreads, and weaker investor belief. Most GCC sovereigns bring fairly little financial obligation and funding dangers are for that reason limited in the UAE, the central bank's liquidity management has actually minimized instant issues.

That said, Bahrain has had the ability to rely on support from neighbours, including Saudi Arabia and the UAE, and it effectively raised $1bn from an oversubscribed sovereign bond sale this month, marking the first offering from the area given that the war started. High-frequency financial information underscore the pressure on local public financial resources from the conflict.

ANSR July GCC PRs 50DR+

Middle East Stock Market Patterns for 2026

In Saudi Arabia, the deficit spending more than doubled to SAR125.7 bn, or about 9% of GDP in Q1, driven by a decline in oil income and a surge in spending, especially on subsidies, showing contingency outlays connected to the regional environment and a velocity of Vision 2030 costs. In Qatar, the crisis brought oil and gas revenue to a stop, swelling the budget deficit to the biggest since 2017.

GCC inflation dynamics remain irregular, with food prices the primary source of upward pressure and inflation in this category conditioning in Kuwait, Oman and Qatar. By contrast, food inflation remains relatively controlled in Saudi Arabia, likely showing the mitigating impact of its larger domestic food production base and higher supply-chain strength.

We continue to view rate pressures as mostly temporal rather than indicative of a sustained inflationary cycle. Appropriately, we anticipate typical inflation to ease to 2.1% y/y in 2027 as short-term supply-side pressures dissipate. With near-term inflation raised and transit through the Strait likely set to resume gradually, we anticipate the United States Federal Reserve to keep rate of interest on hold until December, and local rate policies to do the same.

We anticipate Iran's GDP to diminish by 10.8% this year (we forecast a 9.4% contraction 3 months ago). Oil production and exports, which provide important revenue and FX inflows, have actually been cut by the US marine blockade, while non-oil activity has been seriously struck. In Iraq, oil exports have collapsed to a trickle and we're anticipating GDP to agreement by around 22% this year, with a sharp 33% rebound in 2027 as oil exports normalise.

By contrast, Syria continues to reintegrate into the worldwide economy after more than a years of civil war. We prepare for GDP growth to typical 9.6% over 2026-2027, supported by renewed financial investment, particularly in banking and energy, monetary reforms, and the gradual reopening of local trade links.

GCC Stock Market Trends in 2026

The World Bank has actually slashed its 2026 development forecast for Middle East economies, saying overall GDP growth in the area is expected to slow from an estimated 3.6% in January to 1.8% for 2026. The closure of the tactical Strait of Hormuz, and damage of energy and public infrastructure, had actually interfered with markets, increased monetary volatility, and weakened the 2026 growth outlook, the World Bank Group said in its Economic Update for the Middle East, North Africa, Afghanistan and Pakistan.

The April 2026 World Bank's Macro Hardship Outlook anticipates that the region's aggregate (omitting the Iran) GDP development will decelerate to 1.8 percent in 2026, down from 4.0 percent estimated for 2025. The 2026 forecast has actually been reduced by 2.4 percentage points since the January forecasts, showing the negative results of the ongoing dispute.

Saudi Arabia: Projection was devalued by 1.2 portion points since January. Development is now anticipated to slow from 4.3% in 2025 to 3.1% in 2026, keeping in mind that Saudi Arabia's outlook remains the greatest among Gulf economies. United Arab Emirates: Growth projection for the UAE has actually fallen by 2.7 percentage points because January.

Qatar: Especially, development projection for the Qatari economy has actually seen a sharp decrease of 11.0 percentage points because January. The economy is now expected to record a contraction of 5.7%, below an estimated growth of 5.3%, due to serious blockage to liquefied gas supplies. Qatar is an essential player in the international energy market, with an international market share of liquefied natural gas (LNG) materials ranging in between 20% and 21%.

Kuwait relies completely (100%) on the Strait of Hormuz to export its crude oil and derivatives. Consequently, closing the strait would suggest a total shutdown of the country's financial lifeline, instantly stopping profits inflows to the state budget plan. Bahrain: Development projection for Bahrain's economy has actually declined by 1.8 portion points because January.