Future-Proofing GCC Portfolios against 2026 Trends

Property prices have come under pressure after a duration of strong development, with current information from the Dubai Land Department revealing a drop in home mortgage transactions and cash sales. We believe the risk of an enduring migrant outflow and a severe decline in the genuine estate sector is low.

As a lasting US-Iran offer takes shape, the fallout from the conflict has tightened regional financial conditions, exposing vulnerabilities through capital outflows, broader bond spreads, and weaker financier sentiment. Most GCC sovereigns carry fairly little financial obligation and financing risks are therefore limited in the UAE, the reserve bank's liquidity management has actually relieved instant concerns.

That stated, Bahrain has actually been able to depend on assistance from neighbours, including Saudi Arabia and the UAE, and it successfully raised $1bn from an oversubscribed sovereign bond sale this month, marking the first offering from the area given that the war started. High-frequency fiscal information highlight the pressure on regional public financial resources from the dispute.

ANSR July GCC PRs 50DR+

GCC Stock Trading Trends for 2026

In Saudi Arabia, the budget plan deficit more than doubled to SAR125.7 bn, or about 9% of GDP in Q1, driven by a decline in oil earnings and a rise in spending, especially on subsidies, showing contingency expenses tied to the regional environment and an acceleration of Vision 2030 costs. In Qatar, the crisis brought oil and gas profits to a stop, swelling the budget plan deficit to the largest since 2017.

GCC inflation dynamics remain unequal, with food rates the primary source of upward pressure and inflation in this category conditioning in Kuwait, Oman and Qatar. By contrast, food inflation stays relatively controlled in Saudi Arabia, likely reflecting the mitigating impact of its bigger domestic food production base and greater supply-chain resilience.

We continue to view price pressures as mostly temporal rather than a sign of a sustained inflationary cycle. Accordingly, we expect typical inflation to relieve to 2.1% y/y in 2027 as short-term supply-side pressures dissipate. With near-term inflation raised and transit through the Strait most likely set to resume slowly, we anticipate the US Federal Reserve to keep rate of interest on hold until December, and regional rate policies to do the same.

We anticipate Iran's GDP to diminish by 10.8% this year (we forecast a 9.4% contraction three months ago). Oil production and exports, which supply essential profits and FX inflows, have actually been curtailed by the United States marine blockade, while non-oil activity has been seriously hit. In Iraq, oil exports have actually 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 international economy after more than a years of civil war. We anticipate GDP development to average 9.6% over 2026-2027, supported by restored financial investment, especially in banking and energy, monetary reforms, and the progressive reopening of regional trade links.

Assessing GCC Investment Resilience for 2026

The World Bank has slashed its 2026 growth forecast for Middle East economies, saying overall GDP growth in the area 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 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 (leaving out the Iran) GDP growth will decrease to 1.8 percent in 2026, down from 4.0 percent estimated for 2025. The 2026 forecast has actually been devalued by 2.4 percentage points considering that the January forecasts, showing the negative effects of the ongoing dispute.

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

Qatar: Significantly, growth forecast for the Qatari economy has actually seen a sharp decline of 11.0 portion points because January. The economy is now anticipated to tape-record a contraction of 5.7%, below an approximated growth of 5.3%, due to severe blockage to liquefied gas supplies. Qatar is an essential player in the international energy market, with a worldwide market share of melted natural gas (LNG) supplies ranging in between 20% and 21%.

Kuwait relies entirely (100%) on the Strait of Hormuz to export its petroleum and derivatives. Subsequently, closing the strait would suggest a total shutdown of the country's financial lifeline, immediately halting profits inflows to the state budget. Bahrain: Growth forecast for Bahrain's economy has decreased by 1.8 percentage points given that January.