International Capital Opportunities within the GCC

Home rates have actually come under pressure after a duration of strong growth, with current data from the Dubai Land Department revealing a drop in home mortgage deals and cash sales. However, we believe the threat of a lasting migrant outflow and an extreme decline in the property sector is low.

As a long lasting US-Iran deal takes shape, the fallout from the dispute has tightened up local financial conditions, exposing vulnerabilities through capital outflows, broader bond spreads, and weaker investor sentiment. Most GCC sovereigns bring relatively little financial obligation and financing risks are therefore limited in the UAE, the reserve bank's liquidity management has reduced instant concerns.

That stated, Bahrain has actually had the ability to count on assistance from neighbours, consisting of 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 because the war started. High-frequency fiscal data underscore the strain on local public financial resources from the dispute.

ANSR July GCC PRs 50DR+

Securing Middle East Investments against 2026 Shifts

In Saudi Arabia, the spending plan deficit more than doubled to SAR125.7 bn, or about 9% of GDP in Q1, driven by a decrease in oil income and a rise in spending, particularly 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 income to a stop, swelling the budget deficit to the largest because 2017.

GCC inflation characteristics stay uneven, with food costs the primary source of upward pressure and inflation in this category strengthening in Kuwait, Oman and Qatar. By contrast, food inflation remains reasonably subdued in Saudi Arabia, most likely showing the mitigating impact of its larger domestic food production base and greater supply-chain strength.

We continue to see rate pressures as mostly temporal instead of a sign of a continual inflationary cycle. Accordingly, we anticipate average inflation to reduce to 2.1% y/y in 2027 as temporary supply-side pressures dissipate. With near-term inflation elevated and transit through the Strait most likely set to resume gradually, we expect the US Federal Reserve to keep rate of interest on hold up until December, and local rate policies to do the same.

We expect Iran's GDP to shrink by 10.8% this year (we forecast a 9.4% contraction 3 months ago). Oil production and exports, which supply important earnings and FX inflows, have been reduced by the US naval blockade, while non-oil activity has actually been severely struck. In Iraq, oil exports have actually collapsed to a trickle and we're forecasting 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 expect GDP development to typical 9.6% over 2026-2027, supported by renewed financial investment, especially in banking and energy, monetary reforms, and the progressive reopening of regional trade links.

Middle East Stock Trading Trends for 2026

The World Bank has actually slashed its 2026 growth forecast for Middle East economies, saying overall GDP development 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 facilities, had actually interrupted markets, increased financial volatility, and compromised 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 forecasts that the area's aggregate (leaving out the Iran) GDP growth will decelerate to 1.8 percent in 2026, down from 4.0 percent approximated for 2025. The 2026 projection has been reduced by 2.4 percentage points considering that the January forecasts, showing the negative impacts of the continuous conflict.

Saudi Arabia: Projection was reduced by 1.2 percentage points given that January. Growth is now anticipated to slow from 4.3% in 2025 to 3.1% in 2026, keeping in mind that Saudi Arabia's outlook stays the strongest amongst Gulf economies. United Arab Emirates: Growth projection for the UAE has fallen by 2.7 portion points considering that January.

Qatar: Especially, growth forecast for the Qatari economy has actually seen a sharp decrease of 11.0 percentage points given that January. The economy is now expected to record a contraction of 5.7%, below an approximated development of 5.3%, due to severe obstruction to liquefied gas products. Qatar is a crucial gamer in the global energy market, with an international market share of liquefied natural gas (LNG) supplies ranging in between 20% and 21%.

Kuwait relies entirely (100%) on the Strait of Hormuz to export its petroleum and derivatives. As a result, closing the strait would suggest a total shutdown of the country's financial lifeline, right away halting earnings inflows to the state budget plan. Bahrain: Development projection for Bahrain's economy has declined by 1.8 portion points considering that January.