Essential Stock Market Strategies for GCC Growth

Threats are tilted to the disadvantage. In case of an extended dispute, the existing effects on the region will be compoundedthrough raised energy and food prices, declining trade, tourism and remittances, increased fiscal pressures, and displacement. "The present crisis is a stark suggestion of the work ahead for the region: not only to weather shocks, but to rebuild more resilient economies with stronger macroeconomic fundamentals, innovate and enhance governance, purchase facilities, and increase employment-creating sectors," said.

With peace and the best action, nations can develop the institutions, abilities and competitive sectors that produce chances for individuals." With this long-term vision in mind, the report takes a close look at the region's potential for industrial policy government actions to increase tactical business activity as a chauffeur of financial development and task creation.

ANSR July GCC PRs 50DR+

Governments in the area have adopted commercial policy at a high rate in the last years, typically through sovereign wealth funds and state-owned enterprises, but the outcomes have actually been mixed. The report highlights the important requirement for strong institutions and cautious targeting of policies. "As countries deal with the heavy toll of the present dispute, it is very important to likewise not forget the work required for long-lasting peace and prosperity," stated.

The Future Investment Landscape of the GCC

Q2 2026: The ICAEW Economic Update Middle East, is a quarterly financial projection for the region prepared directly for the financing profession. The GCC economy deals with a significant contraction this year pending details of the US-Iran contract to end the war. We anticipate energy flows, tourist and financier belief to slowly normalise as war disturbances go away.

ANSR July GCC PRs 50DR+

The interim arrangement between the US and Iran is a considerable action towards reaching a full-blown deal. A complete go back to normality in the Strait of Hormuz will likely take some time, but the threat of a recession-inducing oil price spike has decreased. Global GDP is anticipated to grow by 2.4% this year, 0.2 ppt less than we forecasted 3 months ago, and 3.1% in 2027.

We anticipate a 4.1% contraction in Middle East GDP this year (versus projected 3.6% expansion before the war), greater than the decrease in the first year of the Covid pandemic. Kuwait, Iran, Iraq and Qatar stick out as the hardest hit, owing to their inability to prevent the disruption to local 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 anticipate Oman and Saudi Arabia to be the least adversely affected by the fallout from the dispute, with both economies continuing to broaden this year.

The financial damage sustained in the last couple of months is considerable. Saudi GDP information for Q1 revealed growth slowed to 3% y/y, with non-oil activities broadening by 2.9%, the weakest rate since the Covid pandemic. On a seasonally adjusted basis, GDP contracted 1.2% q/q, driven by a 6.8% fall in oil activities as the Strait of Hormuz disruption hit late in the quarter.

The 2026 Business Landscape of the GCC

Aside from Oman, all GCC manufacturers in addition to Iran and Iraq have actually suffered substantial oil and gas production losses since the start of the conflict. Might information show local production nearly cut in half from pre-war levels, with the decline deepening relative to March and April. Rerouting efforts, including by Saudi Arabia through the East-West Pipeline and the UAE through the Habshan-Fujairah pipeline, have helped avoid an even larger plunge in output.

ANSR July GCC PRs 50DR+

We forecast GCC oil sector output to agreement by 14.5% this year, which will mark the steepest decline in several years. We then expect a 23.5% rebound next year, driven mostly by normalisation from a severely depressed base. On the other hand, oil costs have been volatile, alleviating listed below $85 per barrel as the interim contract was revealed.

In the medium term, we expect oil costs to be slightly lower than our pre-war standard, as the UAE's departure from OPEC+ enables a steady increase in its output towards the 5mn barrel each day production target once trade normalises. Versus this backdrop, the UAE will accelerate the building of a brand-new West-East pipeline that ought to double the capacity of export through Fujairah.

The May PMI surveys reported output growth reaching its strongest level in three months, driven largely by enhanced domestic need. They stay below long-run averages, with weak export orders and cost pressures from higher product and transportation expenses are a typical theme. Overall, we expect a 1.1% contraction in GCC non-energy sectors this year (compared to 4.2% growth pre-war) and a progressive recovery over the remainder of the decade.