GCC Stock Market Trends for 2026

Property costs have come under pressure after a duration of strong development, with current information from the Dubai Land Department revealing a drop in home loan deals and money sales. We think the threat of a long lasting migrant outflow and an extreme decline in the real estate sector is low.

As an enduring US-Iran deal takes shape, the fallout from the conflict has tightened regional monetary conditions, exposing vulnerabilities through capital outflows, wider bond spreads, and weaker investor sentiment. Most GCC sovereigns bring reasonably little financial obligation and funding risks are for that reason restricted in the UAE, the reserve bank's liquidity management has minimized immediate issues.

That said, Bahrain has actually had the ability to rely on support from neighbours, including Saudi Arabia and the UAE, and it successfully raised $1bn from an oversubscribed sovereign bond sale this month, marking the first offering from the region considering that the war started. High-frequency financial information highlight the pressure on local public finances from the dispute.

ANSR July GCC PRs 50DR+

International Investment Prospects within the Middle East

In Saudi Arabia, the budget plan deficit more than doubled to SAR125.7 bn, or about 9% of GDP in Q1, driven by a decline in oil income and a rise in spending, especially on subsidies, reflecting contingency outlays tied to the local environment and an acceleration of Vision 2030 costs. In Qatar, the crisis brought oil and gas revenue to a stop, swelling the budget deficit to the largest because 2017.

GCC inflation dynamics remain unequal, with food costs the main source of upward pressure and inflation in this category strengthening in Kuwait, Oman and Qatar. By contrast, food inflation stays fairly subdued in Saudi Arabia, likely reflecting the mitigating effect of its bigger domestic food production base and greater supply-chain strength.

We continue to view rate pressures as mostly transitory rather than a sign of a sustained inflationary cycle. Accordingly, we anticipate typical inflation to alleviate to 2.1% y/y in 2027 as temporary supply-side pressures dissipate. With near-term inflation raised and transit through the Strait likely set to resume gradually, we anticipate the US Federal Reserve to keep interest rates on hold up until December, and local rate policies to follow suit.

We expect Iran's GDP to diminish by 10.8% this year (we anticipate a 9.4% contraction 3 months ago). Oil production and exports, which offer necessary income and FX inflows, have been cut by the United States naval blockade, while non-oil activity has actually been significantly hit. In Iraq, oil exports have actually collapsed to a drip 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 international economy after more than a years of civil war. We anticipate GDP development to typical 9.6% over 2026-2027, supported by restored financial investment, especially in banking and energy, financial reforms, and the gradual reopening of regional trade links.

Emerging Equity Market Trends in 2026

The World Bank has slashed its 2026 growth projection for Middle East economies, stating general GDP growth in the area is expected to slow from an approximated 3.6% in January to 1.8% for 2026. The closure of the strategic Strait of Hormuz, and destruction of energy and public infrastructure, had actually interfered with markets, increased financial volatility, and weakened the 2026 development 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 Poverty Outlook anticipates that the region's aggregate (excluding the Iran) GDP growth will decrease to 1.8 percent in 2026, down from 4.0 percent estimated for 2025. The 2026 forecast has been reduced by 2.4 percentage points because the January projections, reflecting the unfavorable impacts of the continuous dispute.

Saudi Arabia: Forecast was downgraded by 1.2 percentage points considering that January. Growth is now expected to slow from 4.3% in 2025 to 3.1% in 2026, noting that Saudi Arabia's outlook stays the strongest amongst Gulf economies. United Arab Emirates: Development projection for the UAE has actually fallen by 2.7 portion points because January.

Qatar: Especially, development projection for the Qatari economy has seen a sharp decrease of 11.0 percentage points given that January. The economy is now anticipated to tape-record a contraction of 5.7%, down from an estimated growth of 5.3%, due to extreme obstruction to melted gas materials. Qatar is an essential player in the international energy market, with an international market share of melted natural gas (LNG) products varying between 20% and 21%.

Kuwait relies entirely (100%) on the Strait of Hormuz to export its crude oil and derivatives. Closing the strait would imply a total shutdown of the nation's monetary lifeline, right away stopping profits inflows to the state budget plan. Bahrain: Growth forecast for Bahrain's economy has declined by 1.8 portion points considering that January.