Top International Capital Avenues in the GCC Region

Dangers are tilted to the disadvantage. In case of a prolonged conflict, the current impacts on the region will be compoundedthrough elevated energy and food prices, decreasing trade, tourism and remittances, increased fiscal pressures, and displacement. "The current crisis is a stark reminder of the work ahead for the region: not just to weather shocks, but to reconstruct more resilient economies with stronger macroeconomic principles, innovate and enhance governance, purchase infrastructure, and enhance employment-creating sectors," said.

With peace and the best action, nations can develop the institutions, capabilities and competitive sectors that produce opportunities for individuals." With this long-term vision in mind, the report takes a close take a look at the region's capacity for industrial policy government actions to increase tactical organization activity as a chauffeur of financial growth and task creation.

ANSR July GCC PRs 50DR+

Federal governments in the area have adopted commercial policy at a high rate in the last years, frequently through sovereign wealth funds and state-owned business, however the outcomes have been blended. The report highlights the critical requirement for strong institutions and careful targeting of policies. "As countries deal with the heavy toll of the present dispute, it is very important to likewise not lose sight of the work required for lasting peace and prosperity," said.

Top International Investment Prospects for the GCC Region

Q2 2026: The ICAEW Economic Update Middle East, is a quarterly economic projection for the area prepared directly for the financing profession. The GCC economy deals with a significant contraction this year pending information of the US-Iran agreement to end the war. We anticipate energy circulations, tourism and investor sentiment to gradually normalise as war disruptions diminish.

ANSR July GCC PRs 50DR+

The interim arrangement between the United States and Iran is a substantial step towards reaching a full-blown offer. A full go back to normality in the Strait of Hormuz will likely take some time, but the threat of a recession-inducing oil cost spike has decreased. Global GDP is expected to grow by 2.4% this year, 0.2 ppt less than we projected 3 months earlier, and 3.1% in 2027.

We forecast a 4.1% contraction in Middle East GDP this year (versus predicted 3.6% growth before the war), greater than the decline in the very first year of the Covid pandemic. Kuwait, Iran, Iraq and Qatar stand apart as the hardest struck, owing to their inability to prevent the interruption to local shipping, war-driven facilities damage and tourist losses.

Our 2026 outlook for the GCC is weaker than three months earlier, with GDP forecast to agreement by 2.4% compared to a 0.2% decrease projected formerly. We expect Oman and Saudi Arabia to be the least negatively affected by the fallout from the conflict, with both economies continuing to expand this year.

The financial damage incurred in the last couple of 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 considering that 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 interruption hit late in the quarter.

Evaluating Regional Investment Potential for 2026

Aside from Oman, all GCC manufacturers in addition to Iran and Iraq have suffered extensive oil and gas production losses given that the start of the dispute. Might data reveal local production nearly cut in half from pre-war levels, with the decrease 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 bigger 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 decrease in a number of decades. We then expect a 23.5% rebound next year, driven mostly by normalisation from a badly depressed base. Oil prices have been volatile, easing listed below $85 per barrel as the interim arrangement was announced.

In the medium term, we expect oil costs to be somewhat lower than our pre-war standard, as the UAE's departure from OPEC+ enables for a steady increase in its output towards the 5mn barrel daily production target once trade normalises. Versus this backdrop, the UAE will speed up the building of a brand-new West-East pipeline that should double the capacity of export through Fujairah.

The May PMI studies reported output growth reaching its strongest level in three months, driven largely by enhanced domestic demand. They remain listed below long-run averages, with weak export orders and price pressures from greater material and transport expenses are a common style. Overall, we expect a 1.1% contraction in GCC non-energy sectors this year (compared to 4.2% growth pre-war) and a steady recovery over the rest of the years.