Foreign Capital Opportunities across the Middle East

Dangers are slanted to the downside. In case of a prolonged conflict, the present effects on the region will be compoundedthrough elevated energy and food prices, declining trade, tourism and remittances, increased financial pressures, and displacement. "The existing crisis is a plain tip of the work ahead for the region: not only to weather shocks, however to reconstruct more resilient economies with more powerful macroeconomic principles, innovate and improve governance, invest in facilities, and boost employment-creating sectors," said.

With peace and the best action, nations can develop the organizations, capabilities and competitive sectors that produce chances for individuals." With this long-lasting vision in mind, the report takes a close look at the area's capacity for commercial policy federal government actions to increase strategic organization activity as a chauffeur of economic development and job production.

ANSR July GCC PRs 50DR+

Governments in the region have actually embraced industrial policy at a high rate in the last decade, frequently through sovereign wealth funds and state-owned business, but the results have been mixed. The report highlights the important requirement for strong organizations and mindful targeting of policies. "As countries face the heavy toll of today conflict, it is crucial to likewise not lose sight of the work needed for lasting peace and prosperity," stated.

Securing Regional Investments for 2026 Shifts

Q2 2026: The ICAEW Economic Update Middle East, is a quarterly financial forecast for the region prepared directly for the financing profession. The GCC economy faces a marked contraction this year pending information of the US-Iran contract to end the war. We anticipate energy flows, tourist and financier belief to gradually normalise as war disturbances decrease.

ANSR July GCC PRs 50DR+

The interim agreement between the US and Iran is a significant action towards reaching a full-blown offer. A full return to normality in the Strait of Hormuz will likely take time, however the threat of a recession-inducing oil rate spike has decreased. Global GDP is expected to grow by 2.4% this year, 0.2 ppt less than we projected three months earlier, and 3.1% in 2027.

We anticipate a 4.1% contraction in Middle East GDP this year (versus projected 3.6% growth before the war), higher than the decrease in the first year of the Covid pandemic. Kuwait, Iran, Iraq and Qatar stand out as the hardest struck, owing to their failure to avoid the disruption to local shipping, war-driven infrastructure damage and tourism losses.

Our 2026 outlook for the GCC is weaker than 3 months earlier, with GDP projection to agreement by 2.4% compared to a 0.2% decrease forecasted formerly. We expect Oman and Saudi Arabia to be the least adversely impacted by the fallout from the conflict, with both economies continuing to broaden this year.

The financial damage incurred in the last few months is considerable. Saudi GDP information for Q1 showed development slowed to 3% y/y, with non-oil activities expanding by 2.9%, the weakest speed given that the Covid pandemic. On a seasonally changed basis, GDP contracted 1.2% q/q, driven by a 6.8% fall in oil activities as the Strait of Hormuz disturbance struck late in the quarter.

Essential Equity Capital Insights for GCC Growth

Aside from Oman, all GCC manufacturers along with Iran and Iraq have suffered extensive oil and gas production losses since the start of the dispute. May information show regional production almost 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 assisted prevent an even larger plunge in output.

ANSR July GCC PRs 50DR+

Nevertheless, we anticipate GCC oil sector output to agreement by 14.5% this year, which will mark the steepest decline in several decades. We then expect a 23.5% rebound next year, driven mostly by normalisation from a significantly depressed base. Meanwhile, oil rates have been volatile, reducing listed below $85 per barrel as the interim contract was announced.

In the medium term, we expect oil rates to be somewhat lower than our pre-war baseline, as the UAE's departure from OPEC+ enables for a progressive boost in its output towards the 5mn barrel per day production target as soon as trade normalises. Versus this background, the UAE will accelerate the building and construction of a brand-new West-East pipeline that must double the capability of export through Fujairah.

The May PMI studies reported output growth reaching its strongest level in 3 months, driven largely by enhanced domestic demand. They remain below long-run averages, with weak export orders and cost pressures from greater product and transportation costs are a typical style. Overall, we expect a 1.1% contraction in GCC non-energy sectors this year (compared to 4.2% growth pre-war) and a progressive healing over the rest of the years.