Global Investment Opportunities within the GCC

Dangers are tilted to the disadvantage. In case of an extended dispute, the present influence on the region will be compoundedthrough elevated energy and food prices, decreasing trade, tourism and remittances, increased financial pressures, and displacement. "The current crisis is a plain tip of the work ahead for the region: not only to weather shocks, but to rebuild more resistant economies with more powerful macroeconomic fundamentals, innovate and improve governance, buy infrastructure, and boost employment-creating sectors," said.

With peace and the ideal action, nations can build the institutions, abilities and competitive sectors that create chances for people." With this long-term vision in mind, the report takes a close appearance at the region's potential for commercial policy federal government actions to increase strategic company activity as a driver of economic growth and job production.

ANSR July GCC PRs 50DR+

Federal governments in the region have actually embraced commercial policy at a high rate in the last years, typically through sovereign wealth funds and state-owned enterprises, but the results have been mixed. The report highlights the vital need for strong institutions and cautious targeting of policies. "As nations deal with the heavy toll of today dispute, it is necessary to likewise not lose sight of the work needed for lasting peace and prosperity," stated.

Why Industrial Diversification Can Transform GCC Markets

Q2 2026: The ICAEW Economic Update Middle East, is a quarterly financial projection for the area prepared directly for the finance occupation. The GCC economy faces a significant contraction this year pending information of the US-Iran arrangement to end the war. We expect energy flows, tourist and financier sentiment to gradually normalise as war disruptions subside.

ANSR July GCC PRs 50DR+

The interim contract in between the US and Iran is a significant action towards reaching a full-blown deal. A full return to normality in the Strait of Hormuz will likely require time, however the threat of a recession-inducing oil cost spike has actually declined. Global GDP is anticipated to grow by 2.4% this year, 0.2 ppt less than we predicted three 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), greater than the decrease in the first year of the Covid pandemic. Kuwait, Iran, Iraq and Qatar stick out as the hardest hit, owing to their failure to prevent the disturbance to regional shipping, war-driven infrastructure damage and tourism losses.

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

The economic damage incurred in the last few months is substantial. Saudi GDP information for Q1 showed development slowed to 3% y/y, with non-oil activities broadening by 2.9%, the weakest pace since 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 disruption hit late in the quarter.

2026 GCC Economic Outlook

Aside from Oman, all GCC manufacturers in addition to Iran and Iraq have actually suffered comprehensive oil and gas production losses given that the start of the conflict. May data reveal local production nearly 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 larger plunge in output.

ANSR July GCC PRs 50DR+

We anticipate GCC oil sector output to agreement by 14.5% this year, which will mark the steepest decline in several years. We then anticipate a 23.5% rebound next year, driven mainly by normalisation from a significantly depressed base. Meanwhile, oil rates have actually been unstable, relieving below $85 per barrel as the interim agreement was revealed.

In the medium term, we anticipate oil rates to be a little lower than our pre-war baseline, as the UAE's departure from OPEC+ enables a steady increase in its output towards the 5mn barrel each day production target once trade normalises. Against this background, the UAE will speed up the building of a new West-East pipeline that need to double the capability of export through Fujairah.

The May PMI studies reported output growth reaching its strongest level in three months, driven largely by enhanced domestic demand. They stay below long-run averages, with weak export orders and rate pressures from greater material and transport expenses are a typical style. In general, we anticipate a 1.1% contraction in GCC non-energy sectors this year (compared to 4.2% growth pre-war) and a progressive healing over the rest of the years.