GCC Stock Market Patterns for 2026

Risks are tilted to the drawback. In case of a prolonged conflict, the current impacts on the area will be compoundedthrough elevated energy and food costs, declining trade, tourist and remittances, increased fiscal pressures, and displacement. "The current crisis is a stark tip of the work ahead for the region: not just to weather shocks, but to reconstruct more resilient economies with stronger macroeconomic basics, innovate and improve governance, buy facilities, and increase employment-creating sectors," said.

With peace and the right action, nations can build the institutions, abilities and competitive sectors that develop chances for individuals." With this long-lasting vision in mind, the report takes a close look at the region's capacity for commercial policy federal government actions to increase strategic company activity as a driver of economic development and task creation.

ANSR July GCC PRs 50DR+

Governments in the region have embraced industrial policy at a high rate in the last decade, typically through sovereign wealth funds and state-owned business, but the results have actually been mixed. The report highlights the important requirement for strong institutions and careful targeting of policies. "As nations face the heavy toll of today dispute, it is important to also not lose sight of the work required for lasting peace and success," said.

Key Industrial Expansion for the Future

Q2 2026: The ICAEW Economic Update Middle East, is a quarterly financial projection for the area prepared directly for the financing occupation. The GCC economy deals with a significant contraction this year pending details of the US-Iran contract to end the war. We anticipate energy circulations, tourism and financier sentiment to slowly normalise as war interruptions go away.

ANSR July GCC PRs 50DR+

The interim contract between the United States and Iran is a considerable step towards reaching a full-blown offer. A full go back to normality in the Strait of Hormuz will likely take some time, however the danger of a recession-inducing oil price spike has actually declined. Global GDP is anticipated to grow by 2.4% this year, 0.2 ppt less than we forecasted three months earlier, and 3.1% in 2027.

We forecast a 4.1% contraction in Middle East GDP this year (versus predicted 3.6% growth before the war), higher than the decrease in the very first year of the Covid pandemic. Kuwait, Iran, Iraq and Qatar stand out as the hardest struck, owing to their inability to prevent the disturbance to local shipping, war-driven facilities damage and tourist losses.

Our 2026 outlook for the GCC is weaker than 3 months ago, with GDP forecast to contract by 2.4% compared to a 0.2% decrease projected formerly. We expect Oman and Saudi Arabia to be the least adversely affected by the fallout from the conflict, with both economies continuing to expand this year.

The financial damage incurred in the last few months is significant. Saudi GDP data for Q1 showed growth slowed to 3% y/y, with non-oil activities broadening by 2.9%, the weakest pace because 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 hit late in the quarter.

Assessing GCC Investment Resilience in 2026

Aside from Oman, all GCC manufacturers in addition to Iran and Iraq have suffered extensive oil and gas production losses given that the start of the conflict. Might information reveal regional production almost halved from pre-war levels, with the decrease deepening relative to March and April. Rerouting efforts, consisting of by Saudi Arabia through the East-West Pipeline and the UAE through the Habshan-Fujairah pipeline, have helped avoid an even larger plunge in output.

ANSR July GCC PRs 50DR+

We anticipate GCC oil sector output to agreement by 14.5% this year, which will mark the steepest decrease in numerous decades. We then anticipate a 23.5% rebound next year, driven mainly by normalisation from a seriously depressed base. Oil rates have actually been volatile, reducing listed below $85 per barrel as the interim contract was revealed.

In the medium term, we anticipate oil prices to be a little lower than our pre-war baseline, as the UAE's departure from OPEC+ permits for a steady boost in its output towards the 5mn barrel daily production target when trade normalises. Versus this backdrop, the UAE will accelerate the building and construction of a brand-new West-East pipeline that ought to double the capacity of export through Fujairah.

The May PMI surveys reported output development reaching its strongest level in three months, driven mainly by enhanced domestic need. However, they stay listed below long-run averages, with weak export orders and rate pressures from higher product and transportation expenses are a typical style. Overall, we anticipate a 1.1% contraction in GCC non-energy sectors this year (compared to 4.2% growth pre-war) and a progressive healing over the remainder of the decade.