Key Stock Capital Insights for GCC Investors

Residential or commercial property prices have actually come under pressure after a duration of strong development, with recent information from the Dubai Land Department revealing a drop in home mortgage transactions and money sales. We think the threat of a long lasting migrant outflow and a severe downturn in the real estate sector is low.

As an enduring US-Iran deal takes shape, the fallout from the dispute has actually tightened up local monetary conditions, exposing vulnerabilities through capital outflows, broader bond spreads, and weaker financier belief. Most GCC sovereigns bring relatively little debt and financing threats are for that reason restricted in the UAE, the reserve bank's liquidity management has actually alleviated instant concerns.

That stated, Bahrain has been able to depend on assistance 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 since the war started. High-frequency financial information underscore the stress on local public financial resources from the dispute.

ANSR July GCC PRs 50DR+

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In Saudi Arabia, the deficit spending more than doubled to SAR125.7 bn, or about 9% of GDP in Q1, driven by a decline in oil profits and a surge in costs, especially on subsidies, showing 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 plan deficit to the largest considering that 2017.

GCC inflation dynamics stay irregular, with food prices the main source of upward pressure and inflation in this category fortifying in Kuwait, Oman and Qatar. By contrast, food inflation stays fairly controlled in Saudi Arabia, most likely showing the mitigating result of its larger domestic food production base and higher supply-chain resilience.

We continue to see price pressures as mostly transitory instead of indicative of a continual inflationary cycle. Appropriately, we anticipate typical inflation to ease to 2.1% y/y in 2027 as temporary supply-side pressures dissipate. With near-term inflation raised and transit through the Strait likely set to resume gradually, we expect the US Federal Reserve to keep rates of interest on hold until December, and local rate policies to follow match.

We anticipate 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 necessary revenue and FX inflows, have been reduced by the US naval blockade, while non-oil activity has actually been badly struck. In Iraq, oil exports have actually collapsed to a drip and we're anticipating 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 years of civil war. We prepare for GDP development to typical 9.6% over 2026-2027, supported by restored financial investment, particularly in banking and energy, financial reforms, and the steady reopening of regional trade links.

International Capital Opportunities across the Middle East

The World Bank has slashed its 2026 development projection for Middle East economies, stating overall GDP growth in the region is expected 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 actually disrupted markets, increased financial volatility, and damaged 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 Poverty Outlook anticipates that the region's aggregate (omitting the Iran) GDP growth will decrease to 1.8 percent in 2026, below 4.0 percent approximated for 2025. The 2026 projection has actually been reduced by 2.4 percentage points considering that the January forecasts, showing the negative results of the continuous conflict.

Saudi Arabia: Forecast was downgraded by 1.2 percentage points given that January. Development is now anticipated to slow from 4.3% in 2025 to 3.1% in 2026, keeping in mind that Saudi Arabia's outlook stays the greatest among Gulf economies. United Arab Emirates: Growth projection for the UAE has actually fallen by 2.7 percentage points since January.

Qatar: Notably, growth projection for the Qatari economy has seen a sharp decrease of 11.0 portion points since January. The economy is now expected to record a contraction of 5.7%, down from an estimated development of 5.3%, due to extreme blockage to liquefied gas materials. Qatar is a key player in the international energy market, with a global market share of melted natural gas (LNG) supplies ranging between 20% and 21%.

Kuwait relies completely (100%) on the Strait of Hormuz to export its crude oil and derivatives. Closing the strait would suggest a complete shutdown of the nation's monetary lifeline, immediately halting revenue inflows to the state budget. Bahrain: Growth projection for Bahrain's economy has declined by 1.8 portion points considering that January.