Top Foreign Investment Avenues in the GCC Region

Risks are slanted to the drawback. In the occasion of a prolonged conflict, the existing impacts on the region will be compoundedthrough raised energy and food rates, decreasing trade, tourist and remittances, increased financial pressures, and displacement. "The existing crisis is a plain suggestion of the work ahead for the area: not just to weather shocks, however to restore more resilient economies with more powerful macroeconomic basics, innovate and enhance governance, purchase facilities, and increase employment-creating sectors," said.

With peace and the right action, countries can build the institutions, abilities and competitive sectors that develop opportunities for people." With this long-lasting vision in mind, the report takes a close take a look at the region's potential for industrial policy federal government actions to increase strategic company activity as a driver of financial growth and job production.

ANSR July GCC PRs 50DR+

Governments in the area have embraced commercial policy at a high rate in the last years, frequently through sovereign wealth funds and state-owned enterprises, however the outcomes have been mixed. The report highlights the important need for strong organizations and cautious targeting of policies. "As nations face the heavy toll of the present dispute, it is necessary to also not forget the work required for lasting peace and success," said.

Middle East Equity Market Patterns in 2026

Q2 2026: The ICAEW Economic Update Middle East, is a quarterly financial projection for the area prepared straight for the financing occupation. The GCC economy deals with a marked contraction this year pending information of the US-Iran arrangement to end the war. We anticipate energy circulations, tourist and investor belief to slowly normalise as war disturbances decrease.

ANSR July GCC PRs 50DR+

The interim contract between the United States and Iran is a substantial step towards reaching a full-blown offer. A complete return to normality in the Strait of Hormuz will likely take some time, however the danger of a recession-inducing oil rate spike has declined. Global GDP is expected to grow by 2.4% this year, 0.2 ppt less than we forecasted three months earlier, and 3.1% in 2027.

We anticipate a 4.1% contraction in Middle East GDP this year (versus projected 3.6% growth before the war), higher than the decline in the very first year of the Covid pandemic. Kuwait, Iran, Iraq and Qatar stand out as the hardest struck, owing to their inability to prevent the disruption to regional shipping, war-driven infrastructure damage and tourist losses.

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

The economic damage sustained in the last couple of months is substantial. Saudi GDP information for Q1 revealed growth slowed to 3% y/y, with non-oil activities broadening by 2.9%, the weakest rate because 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 disturbance hit late in the quarter.

Evaluating Regional Market Resilience for 2026

Aside from Oman, all GCC manufacturers along with Iran and Iraq have actually suffered comprehensive oil and gas production losses since the start of the dispute. Might information 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 helped avoid an even bigger plunge in output.

ANSR July GCC PRs 50DR+

Nonetheless, we anticipate GCC oil sector output to agreement by 14.5% this year, which will mark the steepest decrease in a number of years. We then expect a 23.5% rebound next year, driven largely by normalisation from a badly depressed base. On the other hand, oil prices have been unpredictable, reducing below $85 per barrel as the interim arrangement was announced.

In the medium term, we expect oil costs to be a little lower than our pre-war standard, as the UAE's departure from OPEC+ enables a progressive boost in its output towards the 5mn barrel each day production target once trade normalises. Against this background, the UAE will speed up the construction of a new West-East pipeline that need to 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. They remain listed below long-run averages, with weak export orders and rate pressures from higher material and transportation costs are a common theme. Overall, we anticipate a 1.1% contraction in GCC non-energy sectors this year (compared to 4.2% growth pre-war) and a gradual recovery over the remainder of the decade.