Evaluating GCC Market Resilience for 2026

Property costs have actually come under pressure after a period of strong development, with recent data from the Dubai Land Department showing a drop in mortgage deals and cash sales. However, we believe the threat of an enduring migrant outflow and a severe slump in the genuine estate sector is low.

As a long lasting US-Iran deal takes shape, the fallout from the conflict has tightened local monetary conditions, exposing vulnerabilities through capital outflows, larger bond spreads, and weaker investor belief. Many GCC sovereigns bring reasonably little debt and funding risks are therefore restricted in the UAE, the reserve bank's liquidity management has actually relieved instant concerns.

That stated, Bahrain has actually been able to rely on assistance from neighbours, consisting of 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 data underscore the pressure on regional public finances from the dispute.

ANSR July GCC PRs 50DR+

Upcoming Middle Eastern Financial Forecasts

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, particularly on aids, reflecting contingency investments connected to the regional environment and an acceleration of Vision 2030 costs. In Qatar, the crisis brought oil and gas revenue to a stop, swelling the deficit spending to the largest considering that 2017.

GCC inflation dynamics remain unequal, with food rates the main source of upward pressure and inflation in this classification conditioning in Kuwait, Oman and Qatar. By contrast, food inflation remains reasonably controlled in Saudi Arabia, most likely showing the mitigating impact of its bigger domestic food production base and higher supply-chain resilience.

We continue to view cost pressures as mainly temporal rather than indicative of a continual inflationary cycle. Appropriately, we expect typical inflation to ease to 2.1% y/y in 2027 as momentary supply-side pressures dissipate. With near-term inflation elevated and transit through the Strait most likely set to resume gradually, we anticipate the United States Federal Reserve to keep interest rates on hold up until December, and regional rate policies to do the same.

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

By contrast, Syria continues to reintegrate into the global economy after more than a years of civil war. We anticipate GDP development to average 9.6% over 2026-2027, supported by restored investment, particularly in banking and energy, monetary reforms, and the progressive reopening of regional trade links.

Emerging Stock Trading Trends in 2026

The World Bank has actually slashed its 2026 development forecast for Middle East economies, stating overall GDP growth in the area is anticipated to slow from an estimated 3.6% in January to 1.8% for 2026. The closure of the tactical Strait of Hormuz, and destruction of energy and public infrastructure, had disrupted markets, increased monetary volatility, and damaged 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 Poverty Outlook anticipates that the region's aggregate (omitting the Iran) GDP growth will decrease to 1.8 percent in 2026, below 4.0 percent approximated for 2025. The 2026 projection has actually been devalued by 2.4 percentage points considering that the January projections, showing the unfavorable effects of the continuous conflict.

Saudi Arabia: Forecast was devalued by 1.2 portion points considering that 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 strongest amongst Gulf economies. United Arab Emirates: Growth projection for the UAE has actually fallen by 2.7 portion points given that January.

Qatar: Notably, development forecast for the Qatari economy has seen a sharp decrease of 11.0 portion points given that January. The economy is now expected to tape-record a contraction of 5.7%, below an approximated development of 5.3%, due to severe obstruction to liquefied gas supplies. Qatar is a key player in the global energy market, with an international 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 crude oil and derivatives. Subsequently, closing the strait would imply a complete shutdown of the country's financial lifeline, right away stopping income inflows to the state spending plan. Bahrain: Development projection for Bahrain's economy has actually decreased by 1.8 percentage points because January.