GCC Stock Trading Trends for 2026

Threats are slanted to the downside. In case of a prolonged dispute, the present impacts on the region will be compoundedthrough raised energy and food rates, declining trade, tourism and remittances, increased fiscal pressures, and displacement. "The existing crisis is a stark reminder of the work ahead for the region: not just to weather shocks, however to rebuild more durable economies with more powerful macroeconomic fundamentals, innovate and improve governance, invest in facilities, and increase employment-creating sectors," said.

With peace and the best action, countries can construct the organizations, capabilities and competitive sectors that develop opportunities for people." With this long-term vision in mind, the report takes a close look at the region's potential for commercial policy government actions to increase tactical service activity as a driver of financial development and job development.

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Federal governments in the area have embraced industrial policy at a high rate in the last decade, typically through sovereign wealth funds and state-owned enterprises, but the outcomes have actually been blended. The report highlights the important need for strong organizations and careful targeting of policies. "As countries face the heavy toll of today conflict, it is essential to likewise not forget the work required for lasting peace and prosperity," stated.

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Q2 2026: The ICAEW Economic Update Middle East, is a quarterly financial forecast for the area prepared directly for the financing occupation. The GCC economy faces a marked contraction this year pending details of the US-Iran arrangement to end the war. We expect energy circulations, tourism and financier belief to slowly normalise as war interruptions decrease.

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The interim arrangement in between the US and Iran is a significant step towards reaching a full-blown deal. A complete go back to normality in the Strait of Hormuz will likely take time, but the risk of a recession-inducing oil price spike has actually decreased. International GDP is anticipated to grow by 2.4% this year, 0.2 ppt less than we projected 3 months back, and 3.1% in 2027.

We forecast 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 stick out as the hardest struck, owing to their inability to avoid the disturbance to regional shipping, war-driven facilities damage and tourism losses.

Our 2026 outlook for the GCC is weaker than 3 months back, with GDP projection to agreement by 2.4% compared to a 0.2% decrease predicted formerly. 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 financial damage sustained in the last few months is significant. Saudi GDP information for Q1 revealed development slowed to 3% y/y, with non-oil activities broadening by 2.9%, the weakest pace given that 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 interruption hit late in the quarter.

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Aside from Oman, all GCC producers in addition to Iran and Iraq have actually suffered comprehensive oil and gas production losses since the start of the conflict. Might data show regional production almost 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 actually helped prevent an even bigger plunge in output.

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We anticipate GCC oil sector output to agreement by 14.5% this year, which will mark the steepest decline in a number of decades. We then anticipate a 23.5% rebound next year, driven mostly by normalisation from a severely depressed base. Oil costs have been unstable, relieving listed below $85 per barrel as the interim agreement 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+ enables a steady boost in its output towards the 5mn barrel each day production target as soon as trade normalises. Versus this backdrop, the UAE will speed up 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. They remain below long-run averages, with weak export orders and rate pressures from greater material and transport costs 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 progressive recovery over the remainder of the years.