Global Capital Opportunities within the GCC

Risks are slanted to the disadvantage. In the event of an extended dispute, the existing effect on the area will be compoundedthrough raised energy and food prices, declining trade, tourist and remittances, increased financial pressures, and displacement. "The current crisis is a stark reminder of the work ahead for the area: not just to weather shocks, but to restore more resistant economies with more powerful macroeconomic fundamentals, innovate and improve governance, buy facilities, and increase employment-creating sectors," said.

With peace and the best action, countries can build the institutions, abilities and competitive sectors that develop opportunities for individuals." With this long-lasting vision in mind, the report takes a close look at the region's potential for commercial policy federal government actions to increase strategic service activity as a chauffeur of financial growth and job production.

ANSR July GCC PRs 50DR+

Federal governments in the area have adopted commercial policy at a high rate in the last decade, typically through sovereign wealth funds and state-owned business, however the outcomes have been mixed. The report highlights the vital need for strong organizations and mindful targeting of policies. "As countries face the heavy toll of today conflict, it is essential to also not forget the work required for long-lasting peace and prosperity," stated.

Key International Capital Avenues in the GCC Region

Q2 2026: The ICAEW Economic Update Middle East, is a quarterly economic projection for the area prepared straight for the finance profession. The GCC economy deals with a significant contraction this year pending information of the US-Iran contract to end the war. We expect energy circulations, tourist and investor sentiment to gradually normalise as war disturbances diminish.

ANSR July GCC PRs 50DR+

The interim arrangement in between the United States and Iran is a substantial action towards reaching a full-blown deal. A complete return to normality in the Strait of Hormuz will likely require time, however the risk of a recession-inducing oil cost spike has decreased. Global GDP is expected to grow by 2.4% this year, 0.2 ppt less than we projected three months ago, and 3.1% in 2027.

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

Our 2026 outlook for the GCC is weaker than three months back, with GDP projection to contract by 2.4% compared to a 0.2% decrease projected previously. We anticipate Oman and Saudi Arabia to be the least negatively impacted by the fallout from the conflict, with both economies continuing to expand this year.

The economic damage incurred in the last few months is considerable. Saudi GDP data for Q1 revealed development slowed to 3% y/y, with non-oil activities expanding by 2.9%, the weakest speed 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.

Key Stock Market Insights for Regional Growth

Aside from Oman, all GCC producers as well as Iran and Iraq have suffered extensive oil and gas production losses since the start of the conflict. May data show regional production almost halved 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 helped avoid an even larger plunge in output.

ANSR July GCC PRs 50DR+

Nevertheless, we forecast GCC oil sector output to contract by 14.5% this year, which will mark the steepest decrease in several years. We then expect a 23.5% rebound next year, driven largely by normalisation from a seriously depressed base. Oil rates have been volatile, relieving below $85 per barrel as the interim contract was revealed.

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

The May PMI studies reported output growth reaching its greatest level in three months, driven mainly by enhanced domestic need. They stay listed below long-run averages, with weak export orders and price pressures from higher material and transport expenses are a common style. Overall, we anticipate a 1.1% contraction in GCC non-energy sectors this year (compared to 4.2% development pre-war) and a steady recovery over the remainder of the decade.