Foreign Capital Opportunities across the GCC

Property prices have come under pressure after a duration of strong growth, with current information from the Dubai Land Department revealing a drop in home mortgage transactions and money sales. We think the threat of a lasting migrant outflow and a serious downturn in the real estate sector is low.

As an enduring US-Iran deal takes shape, the fallout from the dispute has actually tightened regional financial conditions, exposing vulnerabilities through capital outflows, broader bond spreads, and weaker investor sentiment. Most GCC sovereigns carry relatively little financial obligation and funding dangers are therefore restricted in the UAE, the reserve bank's liquidity management has actually alleviated instant issues.

That stated, Bahrain has actually had the ability 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 very first offering from the area considering that the war started. High-frequency financial data underscore the stress on local public finances from the conflict.

ANSR July GCC PRs 50DR+

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

GCC inflation characteristics stay uneven, with food prices the primary source of upward pressure and inflation in this category conditioning in Kuwait, Oman and Qatar. By contrast, food inflation remains reasonably suppressed in Saudi Arabia, likely reflecting the mitigating impact of its larger domestic food production base and higher supply-chain durability.

We continue to view cost pressures as mainly temporal instead of indicative of a sustained inflationary cycle. Accordingly, we expect average inflation to reduce to 2.1% y/y in 2027 as short-lived supply-side pressures dissipate. With near-term inflation raised and transit through the Strait likely set to resume slowly, we anticipate the United States Federal Reserve to keep rate of interest on hold till December, and regional rate policies to follow match.

We anticipate 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 essential income and FX inflows, have actually been curtailed by the US naval blockade, while non-oil activity has actually been badly hit. In Iraq, oil exports have collapsed to a drip 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 worldwide economy after more than a decade of civil war. We prepare for GDP development to typical 9.6% over 2026-2027, supported by renewed financial investment, especially in banking and energy, financial reforms, and the steady reopening of regional trade links.

GCC Stock Market Trends for 2026

The World Bank has actually slashed its 2026 growth projection for Middle East economies, stating overall GDP development in the area is expected to slow from an approximated 3.6% in January to 1.8% for 2026. The closure of the strategic Strait of Hormuz, and damage of energy and public facilities, had actually disrupted markets, increased monetary volatility, and damaged 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, down from 4.0 percent approximated for 2025. The 2026 projection has been downgraded by 2.4 percentage points since the January projections, showing the negative results of the continuous dispute.

Saudi Arabia: Forecast was reduced by 1.2 portion points because 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: Development forecast for the UAE has fallen by 2.7 portion points since January.

Qatar: Notably, growth projection for the Qatari economy has seen a sharp decline of 11.0 percentage points given that January. The economy is now expected to record a contraction of 5.7%, down from an approximated growth of 5.3%, due to severe obstruction to liquefied gas supplies. Qatar is a crucial player in the global energy market, with a worldwide market share of liquefied natural gas (LNG) materials varying between 20% and 21%.

Kuwait relies entirely (100%) on the Strait of Hormuz to export its petroleum and derivatives. Closing the strait would mean a complete shutdown of the country's financial lifeline, immediately stopping revenue inflows to the state budget. Bahrain: Development forecast for Bahrain's economy has actually decreased by 1.8 percentage points considering that January.