International Investment Opportunities across the GCC

Home rates have actually come under pressure after a period of strong development, with current information from the Dubai Land Department revealing a drop in mortgage deals and cash sales. We believe the risk of an enduring migrant outflow and an extreme decline in the real estate sector is low.

As a lasting US-Iran offer takes shape, the fallout from the dispute has actually tightened local monetary conditions, exposing vulnerabilities through capital outflows, larger bond spreads, and weaker investor belief. Most GCC sovereigns bring reasonably little debt and financing dangers are therefore limited in the UAE, the central bank's liquidity management has actually reduced immediate issues.

That stated, Bahrain has actually been able to rely on assistance 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 since the war started. High-frequency financial information underscore the strain on regional public finances from the dispute.

ANSR July GCC PRs 50DR+

Assessing Regional Market Potential in 2026

In Saudi Arabia, the spending plan deficit more than doubled to SAR125.7 bn, or about 9% of GDP in Q1, driven by a decline in oil earnings and a surge in spending, particularly on subsidies, showing contingency outlays connected to the regional environment and an acceleration of Vision 2030 spending. In Qatar, the crisis brought oil and gas earnings to a halt, swelling the deficit spending to the largest considering that 2017.

GCC inflation characteristics stay irregular, with food costs the main source of upward pressure and inflation in this classification fortifying in Kuwait, Oman and Qatar. By contrast, food inflation remains reasonably subdued in Saudi Arabia, likely showing the mitigating result of its bigger domestic food production base and higher supply-chain durability.

We continue to see rate pressures as mostly transitory instead of a sign of a sustained inflationary cycle. Appropriately, we anticipate typical inflation to reduce to 2.1% y/y in 2027 as short-term supply-side pressures dissipate. With near-term inflation raised and transit through the Strait most likely set to resume gradually, we anticipate the US Federal Reserve to keep rate of interest on hold till December, and regional rate policies to follow match.

We expect Iran's GDP to diminish by 10.8% this year (we forecast a 9.4% contraction three months ago). Oil production and exports, which supply essential revenue and FX inflows, have been curtailed by the United States marine blockade, while non-oil activity has been severely 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 international economy after more than a years of civil war. We anticipate GDP growth to typical 9.6% over 2026-2027, supported by renewed investment, especially in banking and energy, financial reforms, and the progressive resuming of regional trade links.

Accelerating Non-Oil Success through Strategic Diversification

The World Bank has slashed its 2026 development projection for Middle East economies, saying total GDP development in the region is expected to slow from an approximated 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 deteriorated the 2026 development outlook, the World Bank Group stated 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 region's aggregate (excluding the Iran) GDP development will decelerate to 1.8 percent in 2026, below 4.0 percent approximated for 2025. The 2026 projection has been reduced by 2.4 percentage points given that the January projections, reflecting the adverse effects of the ongoing dispute.

Saudi Arabia: Projection was reduced by 1.2 percentage points because January. Development is now expected 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: Development projection for the UAE has fallen by 2.7 percentage points since January.

Qatar: Notably, growth projection for the Qatari economy has seen a sharp decline of 11.0 portion points since January. The economy is now expected to tape-record a contraction of 5.7%, below an estimated development of 5.3%, due to extreme blockage to liquefied gas products. Qatar is an essential player in the global energy market, with a global market share of melted natural gas (LNG) materials ranging between 20% and 21%.

Kuwait relies completely (100%) on the Strait of Hormuz to export its petroleum and derivatives. Consequently, closing the strait would suggest a complete shutdown of the nation's monetary lifeline, immediately stopping earnings inflows to the state spending plan. Bahrain: Growth forecast for Bahrain's economy has declined by 1.8 percentage points because January.