GCC Stock Market Patterns in 2026

Property prices have come under pressure after a duration of strong growth, with current information from the Dubai Land Department revealing a drop in home loan deals and money sales. Nonetheless, we think the threat of a long lasting migrant outflow and a severe decline in the realty sector is low.

As a long lasting US-Iran deal takes shape, the fallout from the dispute has actually tightened local financial conditions, exposing vulnerabilities through capital outflows, wider bond spreads, and weaker investor belief. A lot of GCC sovereigns bring fairly little debt and financing threats are for that reason restricted in the UAE, the reserve bank's liquidity management has actually relieved instant concerns.

That stated, Bahrain has been able to depend 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 first offering from the area because the war began. High-frequency fiscal information underscore the strain on regional public financial resources from the dispute.

ANSR July GCC PRs 50DR+

Critical Equity Capital Strategies for Regional Growth

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, particularly on subsidies, reflecting contingency expenses tied to the local environment and an acceleration of Vision 2030 costs. In Qatar, the crisis brought oil and gas profits to a halt, swelling the deficit spending to the largest considering that 2017.

GCC inflation characteristics stay uneven, 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 fairly subdued in Saudi Arabia, likely showing the mitigating impact of its bigger domestic food production base and higher supply-chain resilience.

We continue to see cost pressures as mostly temporal rather than indicative of a continual inflationary cycle. Appropriately, we anticipate average inflation to reduce to 2.1% y/y in 2027 as short-term supply-side pressures dissipate. With near-term inflation elevated and transit through the Strait most likely set to resume gradually, we expect the United States Federal Reserve to keep rates of interest 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 three months ago). Oil production and exports, which supply necessary earnings and FX inflows, have actually been cut by the United States marine blockade, while non-oil activity has been badly hit. In Iraq, oil exports have collapsed to a trickle 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 global economy after more than a decade of civil war. We anticipate GDP growth to average 9.6% over 2026-2027, supported by renewed investment, particularly in banking and energy, monetary reforms, and the progressive resuming of regional trade links.

Essential Economic Expansion in 2026

The World Bank has actually slashed its 2026 growth forecast for Middle East economies, stating total GDP growth in the region is anticipated to slow from an approximated 3.6% in January to 1.8% for 2026. The closure of the strategic Strait of Hormuz, and destruction of energy and public facilities, had interfered with markets, increased financial volatility, and deteriorated the 2026 growth 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 area's aggregate (leaving out the Iran) GDP growth will decelerate to 1.8 percent in 2026, below 4.0 percent estimated for 2025. The 2026 forecast has been reduced by 2.4 percentage points considering that the January forecasts, showing the unfavorable effects of the ongoing conflict.

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

Qatar: Significantly, development forecast for the Qatari economy has actually seen a sharp decrease of 11.0 percentage points considering that January. The economy is now expected to record a contraction of 5.7%, down from an approximated growth of 5.3%, due to serious blockage to liquefied gas products. Qatar is a crucial gamer in the worldwide energy market, with an international market share of liquefied natural gas (LNG) materials ranging between 20% and 21%.

Kuwait relies completely (100%) on the Strait of Hormuz to export its crude oil and derivatives. As a result, closing the strait would indicate a total shutdown of the nation's financial lifeline, right away halting income inflows to the state spending plan. Bahrain: Development forecast for Bahrain's economy has decreased by 1.8 portion points given that January.