International Investment Opportunities across the GCC

Residential or commercial property rates have come under pressure after a duration of strong growth, with recent information from the Dubai Land Department revealing a drop in home mortgage deals and cash sales. Nevertheless, we believe the danger of an enduring migrant outflow and a severe slump in the property sector is low.

As a lasting US-Iran offer takes shape, the fallout from the dispute has tightened up local financial conditions, exposing vulnerabilities through capital outflows, larger bond spreads, and weaker financier belief. Many GCC sovereigns carry fairly little financial obligation and financing threats are for that reason restricted in the UAE, the central bank's liquidity management has actually eased instant issues.

That said, Bahrain has actually had the ability to count on support from neighbours, consisting of Saudi Arabia and the UAE, and it effectively raised $1bn from an oversubscribed sovereign bond sale this month, marking the very first offering from the area since the war started. High-frequency fiscal information highlight the stress on regional public financial resources from the dispute.

ANSR July GCC PRs 50DR+

How Industrial Shifts Can Transform GCC Markets

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 costs, especially on aids, reflecting contingency expenses tied to the regional environment and an acceleration of Vision 2030 spending. In Qatar, the crisis brought oil and gas profits to a stop, swelling the spending plan deficit to the biggest since 2017.

GCC inflation dynamics remain unequal, with food rates the main source of upward pressure and inflation in this classification fortifying in Kuwait, Oman and Qatar. By contrast, food inflation stays relatively subdued in Saudi Arabia, likely reflecting the mitigating result of its bigger domestic food production base and higher supply-chain strength.

We continue to see price pressures as mostly temporal rather than a sign of a continual inflationary cycle. Appropriately, we expect average inflation to reduce to 2.1% y/y in 2027 as momentary supply-side pressures dissipate. With near-term inflation elevated and transit through the Strait likely set to resume slowly, we anticipate the US Federal Reserve to keep rate of interest on hold up until December, and local rate policies to follow fit.

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 provide vital profits and FX inflows, have actually been curtailed by the US naval blockade, while non-oil activity has been seriously hit. In Iraq, oil exports have actually 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 international economy after more than a years of civil war. We anticipate GDP development to average 9.6% over 2026-2027, supported by restored investment, particularly in banking and energy, monetary reforms, and the steady resuming of regional trade links.

Emerging Stock Market Trends in 2026

The World Bank has actually 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 strategic Strait of Hormuz, and damage of energy and public facilities, had actually interfered with markets, increased financial volatility, and damaged the 2026 development 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 Hardship Outlook forecasts that the region's aggregate (excluding the Iran) GDP development will slow down to 1.8 percent in 2026, below 4.0 percent approximated for 2025. The 2026 forecast has been downgraded by 2.4 portion points considering that the January projections, showing the adverse effects of the continuous dispute.

Saudi Arabia: Projection was devalued by 1.2 percentage points because January. Development is now expected to slow from 4.3% in 2025 to 3.1% in 2026, noting that Saudi Arabia's outlook remains the strongest amongst Gulf economies. United Arab Emirates: Development projection for the UAE has fallen by 2.7 percentage points given that January.

Qatar: Especially, growth projection for the Qatari economy has seen a sharp decline of 11.0 portion points given that January. The economy is now anticipated to record a contraction of 5.7%, down from an approximated development of 5.3%, due to serious obstruction to liquefied gas products. Qatar is an essential player in the worldwide energy market, with a global market share of melted natural gas (LNG) supplies ranging in between 20% and 21%.

Kuwait relies entirely (100%) on the Strait of Hormuz to export its petroleum and derivatives. Subsequently, closing the strait would suggest a complete shutdown of the nation's monetary lifeline, right away stopping profits inflows to the state budget. Bahrain: Development forecast for Bahrain's economy has actually decreased by 1.8 percentage points given that January.