Emerging Equity Market Trends for 2026

Property rates have come under pressure after a period of strong development, with recent data from the Dubai Land Department revealing a drop in home loan transactions and money sales. Nevertheless, we think the danger of a long lasting migrant outflow and a serious downturn in the property sector is low.

As a long lasting US-Iran deal takes shape, the fallout from the dispute has actually tightened up regional financial conditions, exposing vulnerabilities through capital outflows, larger bond spreads, and weaker financier sentiment. Many GCC sovereigns carry reasonably little financial obligation and financing risks are for that reason limited in the UAE, the central bank's liquidity management has reduced instant issues.

That said, Bahrain has been able to count 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 very first offering from the region because the war began. High-frequency fiscal data underscore the stress on local public finances from the dispute.

ANSR July GCC PRs 50DR+

GCC Equity Trading Trends for 2026

In Saudi Arabia, the deficit spending more than doubled to SAR125.7 bn, or about 9% of GDP in Q1, driven by a decline in oil income and a surge in spending, especially on aids, showing contingency expenses connected to the regional environment and a velocity of Vision 2030 costs. In Qatar, the crisis brought oil and gas earnings to a halt, swelling the budget deficit to the largest because 2017.

GCC inflation dynamics stay uneven, with food rates the main source of upward pressure and inflation in this classification strengthening in Kuwait, Oman and Qatar. By contrast, food inflation remains reasonably controlled in Saudi Arabia, most likely reflecting the mitigating result of its bigger domestic food production base and higher supply-chain durability.

We continue to view cost pressures as mostly transitory rather than indicative of a sustained inflationary cycle. Appropriately, we anticipate average inflation to reduce to 2.1% y/y in 2027 as short-term supply-side pressures dissipate. With near-term inflation raised and transit through the Strait likely set to resume slowly, we anticipate the United States Federal Reserve to keep rate of interest on hold till December, and local rate policies to follow match.

We anticipate Iran's GDP to diminish by 10.8% this year (we anticipate a 9.4% contraction three months ago). Oil production and exports, which provide necessary profits and FX inflows, have actually been reduced by the US naval blockade, while non-oil activity has actually been severely struck. In Iraq, oil exports have 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 global economy after more than a decade of civil war. We expect GDP growth to typical 9.6% over 2026-2027, supported by renewed financial investment, especially in banking and energy, monetary reforms, and the gradual resuming of local trade links.

The 2026 Business Climate of Arabia

The World Bank has slashed its 2026 development forecast for Middle East economies, stating total GDP development in the area is expected to slow from an estimated 3.6% in January to 1.8% for 2026. The closure of the tactical Strait of Hormuz, and damage of energy and public infrastructure, had actually disrupted markets, increased monetary volatility, and deteriorated the 2026 growth 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 (excluding the Iran) GDP growth will slow down to 1.8 percent in 2026, down from 4.0 percent estimated for 2025. The 2026 projection has been downgraded by 2.4 portion points since the January projections, showing the adverse impacts of the ongoing dispute.

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

Qatar: Significantly, development projection for the Qatari economy has actually seen a sharp decline of 11.0 percentage points considering that January. The economy is now anticipated to tape a contraction of 5.7%, below an approximated growth of 5.3%, due to serious blockage to liquefied gas products. Qatar is a key player in the worldwide energy market, with a global market share of melted gas (LNG) supplies varying in between 20% and 21%.

Kuwait relies completely (100%) on the Strait of Hormuz to export its petroleum and derivatives. Consequently, closing the strait would mean a total shutdown of the nation's financial lifeline, instantly stopping profits inflows to the state spending plan. Bahrain: Growth forecast for Bahrain's economy has decreased by 1.8 percentage points considering that January.