GCC Stock Trading Patterns in 2026

Home rates have actually come under pressure after a period of strong growth, with recent data from the Dubai Land Department revealing a drop in mortgage transactions and cash sales. We believe the risk of an enduring migrant outflow and a serious slump 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 belief. Most GCC sovereigns bring reasonably little debt and financing risks are therefore limited in the UAE, the main bank's liquidity management has reduced instant concerns.

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

ANSR July GCC PRs 50DR+

Key Foreign Capital Prospects for the GCC Region

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 surge in costs, particularly on subsidies, reflecting contingency expenses connected to the regional environment and a velocity of Vision 2030 spending. In Qatar, the crisis brought oil and gas revenue to a stop, swelling the budget plan deficit to the biggest since 2017.

GCC inflation characteristics remain irregular, with food rates the primary source of upward pressure and inflation in this category strengthening in Kuwait, Oman and Qatar. By contrast, food inflation stays fairly controlled in Saudi Arabia, most likely showing the mitigating effect of its larger domestic food production base and greater supply-chain strength.

We continue to view price pressures as mainly temporal rather than indicative of a continual inflationary cycle. Accordingly, we expect typical inflation to ease to 2.1% y/y in 2027 as short-term supply-side pressures dissipate. With near-term inflation elevated and transit through the Strait likely set to resume gradually, we expect the United States Federal Reserve to keep rate of interest on hold until December, and local rate policies to do the same.

We expect Iran's GDP to diminish by 10.8% this year (we forecast a 9.4% contraction 3 months ago). Oil production and exports, which offer essential earnings and FX inflows, have actually been reduced by the US marine blockade, while non-oil activity has actually been seriously struck. In Iraq, oil exports have 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 international economy after more than a decade of civil war. We expect GDP growth to typical 9.6% over 2026-2027, supported by restored financial investment, particularly in banking and energy, financial reforms, and the gradual resuming of regional trade links.

Positioning Middle East Investments against 2026 Shifts

The World Bank has slashed its 2026 growth projection for Middle East economies, stating general GDP growth in the region 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 interfered with markets, increased financial volatility, and deteriorated the 2026 growth outlook, the World Bank Group stated 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 area'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 reduced by 2.4 portion points considering that the January projections, reflecting the negative impacts of the continuous dispute.

Saudi Arabia: Forecast was downgraded by 1.2 portion points given that January. Development is now anticipated to slow from 4.3% in 2025 to 3.1% in 2026, noting that Saudi Arabia's outlook remains the greatest amongst Gulf economies. United Arab Emirates: Growth forecast for the UAE has actually fallen by 2.7 percentage points since January.

Qatar: Significantly, development projection for the Qatari economy has actually seen a sharp decrease of 11.0 percentage points given that January. The economy is now anticipated to tape a contraction of 5.7%, down from an approximated growth of 5.3%, due to severe blockage to liquefied gas supplies. Qatar is a crucial gamer in the worldwide energy market, with a global market share of liquefied gas (LNG) materials ranging in between 20% and 21%.

Kuwait relies completely (100%) on the Strait of Hormuz to export its petroleum and derivatives. As a result, closing the strait would mean a total shutdown of the nation's monetary lifeline, immediately halting earnings inflows to the state spending plan. Bahrain: Development projection for Bahrain's economy has actually decreased by 1.8 percentage points considering that January.