International Investment Opportunities across the GCC

Residential or commercial property costs have actually come under pressure after a period of strong growth, with current data from the Dubai Land Department showing a drop in home mortgage deals and money sales. Nonetheless, we believe the risk of a lasting migrant outflow and an extreme recession in the realty sector is low.

As a long lasting US-Iran deal takes shape, the fallout from the conflict has tightened up regional monetary conditions, exposing vulnerabilities through capital outflows, wider bond spreads, and weaker financier belief. The majority of GCC sovereigns bring fairly little debt and financing threats are for that reason restricted in the UAE, the central bank's liquidity management has minimized instant issues.

That said, Bahrain has actually had the ability to rely on support from neighbours, including Saudi Arabia and the UAE, and it successfully raised $1bn from an oversubscribed sovereign bond sale this month, marking the first offering from the region given that the war began. High-frequency fiscal information highlight the strain on local public financial resources from the conflict.

ANSR July GCC PRs 50DR+

Upcoming GCC Economic Projections

In Saudi Arabia, the deficit spending 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, reflecting contingency outlays tied to the local environment and an acceleration of Vision 2030 costs. In Qatar, the crisis brought oil and gas earnings to a halt, swelling the budget plan deficit to the biggest since 2017.

GCC inflation dynamics remain irregular, with food costs the primary source of upward pressure and inflation in this category strengthening in Kuwait, Oman and Qatar. By contrast, food inflation remains fairly controlled in Saudi Arabia, likely showing the mitigating effect of its larger domestic food production base and greater supply-chain resilience.

We continue to see rate pressures as largely transitory rather than indicative of a sustained inflationary cycle. Appropriately, we anticipate average 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 slowly, we anticipate the United States Federal Reserve to keep rates of interest on hold until December, and local rate policies to do the same.

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 provide vital revenue and FX inflows, have been curtailed by the United States naval blockade, while non-oil activity has been significantly struck. In Iraq, oil exports have actually 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 global economy after more than a years of civil war. We expect GDP development to typical 9.6% over 2026-2027, supported by restored financial investment, especially in banking and energy, financial reforms, and the steady resuming of regional trade links.

Why Economic Shifts Can Transform Arabian Markets

The World Bank has slashed its 2026 growth forecast for Middle East economies, stating overall GDP growth 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 destruction of energy and public facilities, had interrupted markets, increased financial volatility, and deteriorated the 2026 development outlook, the World Bank Group said in its Economic Update for the Middle East, North Africa, Afghanistan and Pakistan.

The April 2026 World Bank's Macro Hardship Outlook anticipates that the area's aggregate (excluding the Iran) GDP growth will decelerate to 1.8 percent in 2026, below 4.0 percent approximated for 2025. The 2026 projection has actually been devalued by 2.4 portion points considering that the January forecasts, reflecting the adverse impacts of the continuous dispute.

Saudi Arabia: Projection was downgraded by 1.2 percentage points because January. Development is now expected to slow from 4.3% in 2025 to 3.1% in 2026, noting that Saudi Arabia's outlook stays the strongest amongst Gulf economies. United Arab Emirates: Development projection for the UAE has fallen by 2.7 portion points since January.

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

Kuwait relies totally (100%) on the Strait of Hormuz to export its petroleum and derivatives. Closing the strait would imply a complete shutdown of the nation's monetary lifeline, immediately halting revenue inflows to the state budget plan. Bahrain: Growth forecast for Bahrain's economy has actually declined by 1.8 portion points because January.