Global Capital Opportunities across the GCC

Residential or commercial property prices have actually come under pressure after a duration of strong growth, with current information from the Dubai Land Department showing a drop in mortgage deals and cash sales. We think the risk of a lasting migrant outflow and a severe downturn in the real estate sector is low.

As a long lasting US-Iran deal takes shape, the fallout from the conflict has actually tightened up local monetary conditions, exposing vulnerabilities through capital outflows, wider bond spreads, and weaker investor sentiment. Many GCC sovereigns bring fairly little financial obligation and financing risks are therefore limited in the UAE, the reserve bank's liquidity management has eased instant issues.

That stated, Bahrain has actually had the ability to rely on assistance from neighbours, including Saudi Arabia and the UAE, and it effectively raised $1bn from an oversubscribed sovereign bond sale this month, marking the very first offering from the area considering that the war began. High-frequency fiscal information highlight the stress on regional public financial resources from the conflict.

ANSR July GCC PRs 50DR+

Mastering Capital Diversification for a Global Economy

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 revenue and a surge in spending, especially on aids, reflecting contingency expenses tied to the regional environment and an acceleration of Vision 2030 spending. In Qatar, the crisis brought oil and gas profits to a stop, swelling the deficit spending to the biggest given that 2017.

GCC inflation dynamics stay irregular, with food rates the main source of upward pressure and inflation in this category conditioning in Kuwait, Oman and Qatar. By contrast, food inflation stays reasonably subdued in Saudi Arabia, most likely showing the mitigating effect of its larger domestic food production base and higher supply-chain resilience.

We continue to view cost pressures as mostly temporal rather than a sign of a continual inflationary cycle. Appropriately, we anticipate typical inflation to ease to 2.1% y/y in 2027 as short-term supply-side pressures dissipate. With near-term inflation raised and transit through the Strait likely set to resume gradually, we expect the United States Federal Reserve to keep rate of interest on hold up until December, and local rate policies to follow match.

We expect Iran's GDP to shrink by 10.8% this year (we anticipate a 9.4% contraction three months ago). Oil production and exports, which offer necessary profits and FX inflows, have been curtailed by the United States marine blockade, while non-oil activity has actually been significantly hit. In Iraq, oil exports have actually collapsed to a drip and we're forecasting 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 prepare for GDP growth to average 9.6% over 2026-2027, supported by restored financial investment, especially in banking and energy, financial reforms, and the gradual reopening of local trade links.

Driving Economic Growth via Global Diversification

The World Bank has actually slashed its 2026 growth projection for Middle East economies, saying total GDP growth in the region is anticipated to slow from an approximated 3.6% in January to 1.8% for 2026. The closure of the tactical Strait of Hormuz, and destruction of energy and public facilities, had interrupted markets, increased monetary 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 Hardship Outlook forecasts that the region's aggregate (excluding the Iran) GDP development will slow down to 1.8 percent in 2026, below 4.0 percent approximated for 2025. The 2026 projection has been downgraded by 2.4 percentage points because the January projections, reflecting the unfavorable effects of the continuous conflict.

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

Qatar: Significantly, development forecast for the Qatari economy has actually seen a sharp decrease of 11.0 portion points considering that January. The economy is now expected to record a contraction of 5.7%, below an estimated development of 5.3%, due to serious blockage to liquefied gas products. Qatar is a crucial gamer in the international energy market, with a worldwide market share of melted gas (LNG) materials ranging between 20% and 21%.

Kuwait relies completely (100%) on the Strait of Hormuz to export its crude oil and derivatives. Consequently, closing the strait would indicate a total shutdown of the country's financial lifeline, right away stopping profits inflows to the state budget plan. Bahrain: Growth projection for Bahrain's economy has actually declined by 1.8 percentage points given that January.