Global Capital Opportunities across the GCC

Threats are slanted to the disadvantage. In the occasion of an extended conflict, the present influence on the region will be compoundedthrough raised energy and food prices, declining trade, tourist and remittances, increased fiscal pressures, and displacement. "The existing crisis is a plain tip of the work ahead for the region: not just to weather shocks, however to restore more durable economies with stronger macroeconomic fundamentals, innovate and improve governance, invest in infrastructure, and increase employment-creating sectors," said.

With peace and the best action, countries can build the institutions, capabilities and competitive sectors that produce chances for people." With this long-lasting vision in mind, the report takes a close take a look at the area's capacity for commercial policy government actions to increase strategic business activity as a driver of financial development and job production.

ANSR July GCC PRs 50DR+

Governments in the area have actually embraced commercial policy at a high rate in the last years, often through sovereign wealth funds and state-owned business, but the results have been mixed. The report highlights the crucial requirement for strong institutions and careful targeting of policies. "As countries face the heavy toll of the present dispute, it is very important to also not forget the work required for long-lasting peace and prosperity," stated.

Evaluating GCC Market Resilience in 2026

Q2 2026: The ICAEW Economic Update Middle East, is a quarterly economic forecast for the area prepared directly for the financing profession. The GCC economy deals with a marked contraction this year pending details of the US-Iran contract to end the war. We expect energy flows, tourist and investor sentiment to gradually normalise as war interruptions go away.

ANSR July GCC PRs 50DR+

The interim arrangement between the United States and Iran is a substantial step towards reaching a full-blown deal. A complete return to normality in the Strait of Hormuz will likely take some time, but the risk of a recession-inducing oil rate spike has declined. Worldwide GDP is anticipated to grow by 2.4% this year, 0.2 ppt less than we projected 3 months earlier, and 3.1% in 2027.

We anticipate a 4.1% contraction in Middle East GDP this year (versus predicted 3.6% expansion before the war), higher than the decline in the very first year of the Covid pandemic. Kuwait, Iran, Iraq and Qatar stick out as the hardest hit, owing to their failure to avoid the disturbance to local shipping, war-driven infrastructure 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 expect Oman and Saudi Arabia to be the least adversely affected by the fallout from the conflict, with both economies continuing to broaden this year.

The financial damage sustained in the last few months is substantial. Saudi GDP information for Q1 showed growth slowed to 3% y/y, with non-oil activities broadening by 2.9%, the weakest speed given that the Covid pandemic. On a seasonally changed basis, GDP contracted 1.2% q/q, driven by a 6.8% fall in oil activities as the Strait of Hormuz interruption struck late in the quarter.

Key Equity Market Insights for GCC Growth

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. Might data reveal regional production almost halved 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 helped prevent an even bigger plunge in output.

ANSR July GCC PRs 50DR+

However, we anticipate GCC oil sector output to contract by 14.5% this year, which will mark the steepest decline in numerous decades. We then expect a 23.5% rebound next year, driven mainly by normalisation from a significantly depressed base. Oil rates have actually been unpredictable, relieving listed below $85 per barrel as the interim agreement was announced.

In the medium term, we expect oil rates to be slightly lower than our pre-war standard, as the UAE's departure from OPEC+ permits a steady increase in its output towards the 5mn barrel each day production target as soon as trade normalises. Against this background, the UAE will accelerate the building and construction of a new West-East pipeline that must double the capacity of export through Fujairah.

The May PMI studies reported output growth reaching its strongest level in 3 months, driven largely by improved domestic demand. However, they remain listed below long-run averages, with weak export orders and price pressures from greater material and transportation 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 steady recovery over the remainder of the decade.