Global Investment Opportunities across the GCC

Risks are slanted to the drawback. In case of an extended conflict, the existing influence on the region will be compoundedthrough raised energy and food rates, decreasing trade, tourist and remittances, increased fiscal pressures, and displacement. "The present crisis is a plain reminder of the work ahead for the region: not just to weather shocks, but to restore more resilient economies with stronger macroeconomic fundamentals, innovate and improve governance, purchase facilities, and increase employment-creating sectors," said.

With peace and the best action, nations can build the organizations, abilities and competitive sectors that develop chances for individuals." With this long-term vision in mind, the report takes a close take a look at the area's potential for commercial policy federal government actions to increase strategic service activity as a motorist of economic development and task development.

ANSR July GCC PRs 50DR+

Governments in the area have actually adopted commercial policy at a high rate in the last decade, often through sovereign wealth funds and state-owned business, but the outcomes have actually been mixed. The report highlights the crucial requirement for strong organizations and mindful targeting of policies. "As nations face the heavy toll of the present dispute, it is very important to also not forget the work needed for long-lasting peace and success," stated.

How Economic Shifts Can Shape GCC Markets

Q2 2026: The ICAEW Economic Update Middle East, is a quarterly economic projection for the region prepared directly for the financing profession. The GCC economy deals with a marked contraction this year pending information of the US-Iran arrangement to end the war. We expect energy flows, tourist and investor belief to slowly normalise as war disturbances go away.

ANSR July GCC PRs 50DR+

The interim contract in between the US and Iran is a significant action towards reaching a full-blown deal. A complete go back to normality in the Strait of Hormuz will likely take some time, but the threat of a recession-inducing oil cost spike has actually decreased. Global GDP is expected to grow by 2.4% this year, 0.2 ppt less than we predicted 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), greater than the decline 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 avoid the interruption to regional shipping, war-driven infrastructure damage and tourism losses.

Our 2026 outlook for the GCC is weaker than three months back, 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 broaden this year.

The financial damage incurred in the last couple of months is considerable. Saudi GDP data for Q1 revealed development slowed to 3% y/y, with non-oil activities broadening by 2.9%, the weakest speed given that the Covid pandemic. On a seasonally adjusted basis, GDP contracted 1.2% q/q, driven by a 6.8% fall in oil activities as the Strait of Hormuz disruption hit late in the quarter.

Top International Investment Avenues for the GCC Region

Aside from Oman, all GCC manufacturers as well as Iran and Iraq have suffered extensive oil and gas production losses given that the start of the dispute. May information reveal regional production nearly cut in half from pre-war levels, with the decline 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 bigger plunge in output.

ANSR July GCC PRs 50DR+

We forecast GCC oil sector output to agreement by 14.5% this year, which will mark the steepest decrease in a number of decades. We then anticipate a 23.5% rebound next year, driven mainly by normalisation from a significantly depressed base. Meanwhile, oil rates have been unstable, alleviating below $85 per barrel as the interim agreement was announced.

In the medium term, we expect oil prices to be a little lower than our pre-war baseline, as the UAE's departure from OPEC+ enables a gradual increase in its output towards the 5mn barrel daily production target as soon as trade normalises. Versus this background, the UAE will accelerate the building of a new West-East pipeline that should double the capability of export through Fujairah.

The May PMI surveys reported output development reaching its strongest level in three months, driven mainly by improved domestic need. They stay below long-run averages, with weak export orders and cost pressures from greater product and transportation expenses are a common theme. In general, we expect a 1.1% contraction in GCC non-energy sectors this year (compared to 4.2% growth pre-war) and a gradual recovery over the remainder of the decade.