Optimizing Wealth Strategies for a Global Economy

Residential or commercial property costs have come under pressure after a duration of strong development, with recent information from the Dubai Land Department revealing a drop in mortgage transactions and money sales. Nevertheless, we think the danger of a long lasting migrant outflow and a severe recession in the realty sector is low.

As an enduring US-Iran deal takes shape, the fallout from the conflict has actually tightened up regional monetary conditions, exposing vulnerabilities through capital outflows, larger bond spreads, and weaker investor belief. A lot of GCC sovereigns bring relatively little financial obligation and funding threats are therefore restricted in the UAE, the central bank's liquidity management has actually reduced instant concerns.

That said, Bahrain has actually been able to rely on support from neighbours, including 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 given that the war began. High-frequency fiscal information highlight the pressure on regional public financial resources from the dispute.

ANSR July GCC PRs 50DR+

Accelerating Industrial Success through Global Diversification

In Saudi Arabia, the budget deficit 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 costs, particularly on subsidies, showing contingency expenses connected to the local environment and an acceleration of Vision 2030 costs. In Qatar, the crisis brought oil and gas revenue to a stop, swelling the budget plan deficit to the biggest considering that 2017.

GCC inflation characteristics remain unequal, with food rates the main source of upward pressure and inflation in this classification strengthening in Kuwait, Oman and Qatar. By contrast, food inflation stays reasonably subdued in Saudi Arabia, most likely reflecting the mitigating impact of its bigger domestic food production base and greater supply-chain resilience.

We continue to view price pressures as mainly transitory instead of a sign of a sustained inflationary cycle. Appropriately, we expect typical inflation to relieve to 2.1% y/y in 2027 as short-term supply-side pressures dissipate. With near-term inflation elevated and transit through the Strait likely set to resume slowly, we expect the US Federal Reserve to keep rate of interest on hold until December, and local rate policies to do the same.

We anticipate Iran's GDP to shrink by 10.8% this year (we forecast a 9.4% contraction three months ago). Oil production and exports, which provide necessary income and FX inflows, have actually been cut by the United States marine blockade, while non-oil activity has actually been significantly struck. In Iraq, oil exports have collapsed to a drip and we're forecasting GDP to agreement by around 22% this year, with a sharp 33% rebound in 2027 as oil exports normalise.

By contrast, Syria continues to reintegrate into the international economy after more than a decade of civil war. We expect GDP growth to typical 9.6% over 2026-2027, supported by restored investment, especially in banking and energy, monetary reforms, and the gradual resuming of regional trade links.

Foreign Investment Opportunities within the GCC

The World Bank has slashed its 2026 development projection for Middle East economies, saying total GDP development in the area is anticipated to slow from an estimated 3.6% in January to 1.8% for 2026. The closure of the strategic Strait of Hormuz, and damage of energy and public infrastructure, had actually interfered with markets, increased financial volatility, and compromised 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 forecasts that the region's aggregate (omitting the Iran) GDP growth will decelerate to 1.8 percent in 2026, down from 4.0 percent approximated for 2025. The 2026 forecast has actually been reduced by 2.4 portion points since the January projections, reflecting the negative effects of the ongoing dispute.

Saudi Arabia: Projection was reduced by 1.2 percentage points since January. Development 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: Development forecast for the UAE has actually fallen by 2.7 portion points because January.

Qatar: Notably, growth projection for the Qatari economy has seen a sharp decline of 11.0 portion points considering that January. The economy is now expected to tape a contraction of 5.7%, below an estimated development of 5.3%, due to serious obstruction to melted gas materials. Qatar is a crucial player in the global energy market, with a worldwide market share of melted natural gas (LNG) supplies varying in between 20% and 21%.

Kuwait relies entirely (100%) on the Strait of Hormuz to export its unrefined oil and derivatives. Consequently, closing the strait would indicate a total shutdown of the nation's monetary lifeline, immediately halting earnings inflows to the state budget. Bahrain: Development forecast for Bahrain's economy has decreased by 1.8 percentage points given that January.