Key Equity Capital Strategies for Regional Investors

Risks are tilted to the downside. In case of an extended dispute, the existing influence on the area will be compoundedthrough raised energy and food rates, decreasing trade, tourist and remittances, increased financial pressures, and displacement. "The current crisis is a plain pointer of the work ahead for the region: not only to weather shocks, however to reconstruct more resistant economies with stronger macroeconomic basics, innovate and improve governance, invest in facilities, and boost employment-creating sectors," stated.

With peace and the right action, nations can develop the institutions, 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 industrial policy government actions to increase strategic business activity as a motorist of financial development and task creation.

ANSR July GCC PRs 50DR+

Federal governments in the area have actually adopted commercial policy at a high rate in the last years, often through sovereign wealth funds and state-owned enterprises, but the results have been blended. The report highlights the vital requirement for strong institutions and cautious targeting of policies. "As countries deal with the heavy toll of today dispute, it is necessary to also not lose sight of the work needed for lasting peace and success," stated.

Optimizing Capital Strategies in a Global Economy

Q2 2026: The ICAEW Economic Update Middle East, is a quarterly financial forecast for the area prepared directly for the finance occupation. The GCC economy deals with a marked contraction this year pending information of the US-Iran agreement to end the war. We expect energy circulations, tourism and financier belief to gradually normalise as war interruptions go away.

ANSR July GCC PRs 50DR+

The interim agreement in between the US and Iran is a considerable step towards reaching a full-blown offer. A complete go back to normality in the Strait of Hormuz will likely require time, however the risk of a recession-inducing oil price spike has decreased. Global GDP is anticipated to grow by 2.4% this year, 0.2 ppt less than we forecasted 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 first year of the Covid pandemic. Kuwait, Iran, Iraq and Qatar stand out as the hardest hit, owing to their inability to prevent the disruption to local shipping, war-driven facilities damage and tourism losses.

Our 2026 outlook for the GCC is weaker than 3 months back, with GDP projection to contract by 2.4% compared to a 0.2% decrease predicted previously. We anticipate Oman and Saudi Arabia to be the least negatively impacted by the fallout from the conflict, with both economies continuing to broaden this year.

The financial damage sustained in the last few months is significant. Saudi GDP information for Q1 showed growth slowed to 3% y/y, with non-oil activities expanding by 2.9%, the weakest speed since 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 disturbance struck late in the quarter.

Driving Economic Growth via Strategic Diversification

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 dispute. May information reveal regional production almost cut in half 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 assisted prevent an even larger plunge in output.

ANSR July GCC PRs 50DR+

We anticipate GCC oil sector output to agreement by 14.5% this year, which will mark the steepest decline in numerous years. We then anticipate a 23.5% rebound next year, driven mostly by normalisation from a seriously depressed base. Meanwhile, oil prices have been unstable, relieving below $85 per barrel as the interim arrangement was revealed.

In the medium term, we expect oil rates to be slightly 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 when trade normalises. Versus this backdrop, the UAE will accelerate the building of a brand-new West-East pipeline that ought to double the capacity of export through Fujairah.

The May PMI surveys reported output growth reaching its strongest level in 3 months, driven mainly by enhanced domestic demand. They remain listed below long-run averages, with weak export orders and rate pressures from higher material and transport expenses are a typical theme. In general, we expect a 1.1% contraction in GCC non-energy sectors this year (compared to 4.2% development pre-war) and a gradual healing over the rest of the decade.