Emerging Stock Trading Patterns for 2026

Property costs have come under pressure after a period of strong growth, with current data from the Dubai Land Department revealing a drop in home loan transactions and cash sales. Nonetheless, we think the threat of a long lasting migrant outflow and a serious slump in the real estate sector is low.

As a long lasting US-Iran deal takes shape, the fallout from the dispute has tightened regional financial conditions, exposing vulnerabilities through capital outflows, larger bond spreads, and weaker investor sentiment. Most GCC sovereigns carry reasonably little financial obligation and funding dangers are for that reason restricted in the UAE, the central bank's liquidity management has reduced immediate issues.

That said, Bahrain has actually been able to rely on support from neighbours, consisting of Saudi Arabia and the UAE, and it successfully raised $1bn from an oversubscribed sovereign bond sale this month, marking the first offering from the area considering that the war began. High-frequency fiscal information underscore the pressure on local public finances from the conflict.

ANSR July GCC PRs 50DR+

Driving Non-Oil Success via Strategic 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 earnings and a surge in costs, particularly on subsidies, reflecting contingency expenses tied to the regional environment and an acceleration of Vision 2030 costs. In Qatar, the crisis brought oil and gas income to a halt, swelling the budget deficit to the biggest because 2017.

GCC inflation dynamics stay irregular, with food prices the main source of upward pressure and inflation in this classification fortifying in Kuwait, Oman and Qatar. By contrast, food inflation remains reasonably controlled in Saudi Arabia, likely showing the mitigating impact of its larger domestic food production base and greater supply-chain strength.

We continue to view price pressures as mostly transitory rather than 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 raised and transit through the Strait most likely set to resume gradually, we expect the US Federal Reserve to keep rate of interest on hold until December, and regional rate policies to follow suit.

We expect Iran's GDP to diminish by 10.8% this year (we forecast a 9.4% contraction three months ago). Oil production and exports, which offer essential revenue and FX inflows, have been cut by the US naval blockade, while non-oil activity has been badly struck. In Iraq, oil exports have collapsed to a trickle and we're anticipating 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 international economy after more than a years of civil war. We prepare for GDP development to average 9.6% over 2026-2027, supported by restored financial investment, particularly in banking and energy, monetary reforms, and the gradual reopening of regional trade links.

Accelerating Economic Success via Global Diversification

The World Bank has slashed its 2026 growth projection for Middle East economies, saying total GDP growth in the region 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 facilities, had interfered with markets, increased monetary volatility, and weakened the 2026 development 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 (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 portion points since the January forecasts, reflecting the adverse effects of the continuous conflict.

Saudi Arabia: Projection was reduced by 1.2 percentage points considering that January. Growth is now anticipated to slow from 4.3% in 2025 to 3.1% in 2026, noting that Saudi Arabia's outlook remains the strongest amongst Gulf economies. United Arab Emirates: Growth forecast for the UAE has actually fallen by 2.7 portion points considering that January.

Qatar: Notably, growth projection for the Qatari economy has seen a sharp decline of 11.0 percentage points since January. The economy is now expected to record a contraction of 5.7%, below an estimated growth of 5.3%, due to severe obstruction to liquefied gas supplies. Qatar is an essential player in the worldwide energy market, with an international market share of melted gas (LNG) materials varying in between 20% and 21%.

Kuwait relies totally (100%) on the Strait of Hormuz to export its unrefined oil and derivatives. Subsequently, closing the strait would suggest a complete shutdown of the country's monetary lifeline, immediately halting income inflows to the state spending plan. Bahrain: Development projection for Bahrain's economy has actually declined by 1.8 percentage points because January.