Key Stock Capital Strategies for GCC Investors

Home prices have come under pressure after a duration of strong growth, with current information from the Dubai Land Department showing a drop in mortgage deals and money sales. However, we think the threat of a lasting migrant outflow and an extreme recession in the property sector is low.

As a lasting US-Iran deal takes shape, the fallout from the conflict has actually tightened local financial conditions, exposing vulnerabilities through capital outflows, larger bond spreads, and weaker financier belief. Many GCC sovereigns bring fairly little debt and financing risks are therefore limited in the UAE, the reserve bank's liquidity management has actually alleviated instant issues.

That stated, Bahrain has been able 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 region considering that the war began. High-frequency fiscal information highlight the pressure on regional public financial resources from the dispute.

ANSR July GCC PRs 50DR+

2026 GCC Market Outlook

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 income and a rise in spending, particularly on aids, reflecting contingency outlays connected to the local environment and an acceleration of Vision 2030 spending. In Qatar, the crisis brought oil and gas revenue to a stop, swelling the budget plan deficit to the largest because 2017.

GCC inflation dynamics remain unequal, with food rates the primary source of upward pressure and inflation in this classification fortifying in Kuwait, Oman and Qatar. By contrast, food inflation stays fairly suppressed in Saudi Arabia, likely showing the mitigating result of its bigger domestic food production base and higher supply-chain resilience.

We continue to view cost pressures as mostly temporal rather than indicative of a continual inflationary cycle. Accordingly, we expect average inflation to relieve to 2.1% y/y in 2027 as short-lived supply-side pressures dissipate. With near-term inflation elevated and transit through the Strait most likely set to resume slowly, we anticipate 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 provide important income and FX inflows, have actually been curtailed by the US marine blockade, while non-oil activity has actually been significantly struck. 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 decade of civil war. We anticipate GDP growth to typical 9.6% over 2026-2027, supported by restored investment, especially in banking and energy, monetary reforms, and the steady resuming of regional trade links.

Key Stock Market Insights for Regional Investors

The World Bank has slashed its 2026 development projection 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 strategic Strait of Hormuz, and destruction of energy and public facilities, had actually disrupted 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 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 estimated for 2025. The 2026 forecast has been reduced by 2.4 portion points given that the January projections, showing the negative effects of the continuous dispute.

Saudi Arabia: Projection was devalued by 1.2 portion 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 actually fallen by 2.7 portion points given that January.

Qatar: Significantly, development forecast for the Qatari economy has actually seen a sharp decline 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 obstruction to melted gas products. Qatar is a key player in the worldwide energy market, with a worldwide market share of liquefied gas (LNG) products varying in between 20% and 21%.

Kuwait relies totally (100%) on the Strait of Hormuz to export its crude oil and derivatives. As a result, closing the strait would imply a total shutdown of the country's monetary lifeline, instantly stopping earnings inflows to the state spending plan. Bahrain: Growth projection for Bahrain's economy has decreased by 1.8 percentage points since January.