Key Industrial Shifts in 2026

Residential or commercial property costs have actually come under pressure after a period of strong growth, with recent information from the Dubai Land Department showing a drop in mortgage transactions and money sales. We think the threat of an enduring migrant outflow and a severe slump in the real estate sector is low.

As an enduring US-Iran deal takes shape, the fallout from the dispute has tightened up regional financial conditions, exposing vulnerabilities through capital outflows, wider bond spreads, and weaker financier belief. A lot of GCC sovereigns bring relatively little debt and financing threats are for that reason restricted in the UAE, the reserve bank's liquidity management has actually eased instant concerns.

That stated, Bahrain has actually had the ability to count on support from neighbours, including Saudi Arabia and the UAE, and it successfully raised $1bn from an oversubscribed sovereign bond sale this month, marking the first offering from the region because the war started. High-frequency financial information highlight the stress on regional public financial resources from the conflict.

ANSR July GCC PRs 50DR+

GCC Stock Trading Patterns 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 decrease in oil income and a rise in spending, especially on subsidies, reflecting contingency investments tied to the local environment and a velocity of Vision 2030 costs. In Qatar, the crisis brought oil and gas profits to a stop, swelling the spending plan deficit to the largest since 2017.

GCC inflation characteristics remain irregular, with food costs the main source of upward pressure and inflation in this classification fortifying in Kuwait, Oman and Qatar. By contrast, food inflation stays reasonably controlled in Saudi Arabia, most likely reflecting the mitigating effect of its bigger domestic food production base and higher supply-chain strength.

We continue to view rate pressures as mainly temporal instead of a sign of a continual inflationary cycle. Appropriately, we anticipate average inflation to reduce to 2.1% y/y in 2027 as momentary supply-side pressures dissipate. With near-term inflation raised and transit through the Strait most likely set to resume gradually, we expect the US Federal Reserve to keep interest rates on hold till December, and regional rate policies to do the same.

We expect Iran's GDP to diminish by 10.8% this year (we anticipate a 9.4% contraction 3 months ago). Oil production and exports, which offer vital earnings and FX inflows, have been curtailed by the United States marine blockade, while non-oil activity has actually been severely struck. In Iraq, oil exports have actually collapsed to a drip and we're forecasting GDP to contract by around 22% this year, with a sharp 33% rebound in 2027 as oil exports normalise.

By contrast, Syria continues to reintegrate into the worldwide economy after more than a decade of civil war. We prepare for GDP development to average 9.6% over 2026-2027, supported by renewed investment, especially in banking and energy, monetary reforms, and the gradual resuming of regional trade links.

Upcoming Middle Eastern Market Forecasts

The World Bank has slashed its 2026 development projection for Middle East economies, stating general GDP growth in the area is anticipated to slow from an approximated 3.6% in January to 1.8% for 2026. The closure of the tactical Strait of Hormuz, and destruction of energy and public infrastructure, had actually disrupted markets, increased monetary volatility, and damaged the 2026 growth outlook, the World Bank Group stated in its Economic Update for the Middle East, North Africa, Afghanistan and Pakistan.

The April 2026 World Bank's Macro Hardship Outlook anticipates that the region's aggregate (leaving out the Iran) GDP development will decrease to 1.8 percent in 2026, down from 4.0 percent estimated for 2025. The 2026 projection has been devalued by 2.4 percentage points because the January projections, showing the negative effects of the continuous conflict.

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

Qatar: Especially, growth forecast for the Qatari economy has seen a sharp decline of 11.0 percentage points considering that January. The economy is now expected to record a contraction of 5.7%, below an estimated development of 5.3%, due to severe obstruction to liquefied gas materials. Qatar is an essential gamer in the international energy market, with an international market share of melted gas (LNG) materials varying in between 20% and 21%.

Kuwait relies completely (100%) on the Strait of Hormuz to export its crude oil and derivatives. Subsequently, closing the strait would indicate a complete shutdown of the country's monetary lifeline, instantly halting earnings inflows to the state budget. Bahrain: Growth forecast for Bahrain's economy has actually declined by 1.8 percentage points given that January.