GCC Equity Market Trends in 2026

Property prices have actually come under pressure after a period of strong growth, with current information from the Dubai Land Department showing a drop in home loan transactions and cash sales. We believe the danger of a lasting migrant outflow and a serious slump in the real estate sector is low.

As an enduring US-Iran offer takes shape, the fallout from the dispute has actually tightened up regional financial conditions, exposing vulnerabilities through capital outflows, wider bond spreads, and weaker financier belief. A lot of GCC sovereigns carry fairly little debt and financing threats are for that reason restricted in the UAE, the reserve bank's liquidity management has eased instant concerns.

That said, Bahrain has had the ability to count 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 considering that the war started. High-frequency fiscal information highlight the strain on regional public finances from the dispute.

ANSR July GCC PRs 50DR+

Essential Equity Market Strategies for Regional Growth

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 rise in spending, particularly on aids, showing contingency outlays connected to the local environment and a velocity of Vision 2030 costs. In Qatar, the crisis brought oil and gas profits to a stop, swelling the deficit spending to the largest considering that 2017.

GCC inflation dynamics remain irregular, with food prices the main source of upward pressure and inflation in this category strengthening in Kuwait, Oman and Qatar. By contrast, food inflation stays relatively subdued in Saudi Arabia, likely showing the mitigating impact of its larger domestic food production base and higher supply-chain durability.

We continue to see price pressures as mostly transitory instead of indicative of a sustained inflationary cycle. Appropriately, we expect average inflation to relieve 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 anticipate the US Federal Reserve to keep rates of interest on hold till December, and local rate policies to do the same.

We anticipate Iran's GDP to diminish by 10.8% this year (we anticipate a 9.4% contraction 3 months ago). Oil production and exports, which offer important profits and FX inflows, have actually been curtailed by the US naval blockade, while non-oil activity has been badly hit. In Iraq, oil exports have actually collapsed to a trickle 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 global economy after more than a decade of civil war. We anticipate GDP growth to typical 9.6% over 2026-2027, supported by restored financial investment, especially in banking and energy, monetary reforms, and the gradual reopening of local trade links.

GCC Equity Market Patterns for 2026

The World Bank has slashed its 2026 development projection for Middle East economies, saying total GDP growth in the region is anticipated to slow from an approximated 3.6% in January to 1.8% for 2026. The closure of the tactical Strait of Hormuz, and destruction of energy and public infrastructure, had interfered with markets, increased monetary volatility, and deteriorated the 2026 growth 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 anticipates that the region's aggregate (leaving out the Iran) GDP development will decelerate to 1.8 percent in 2026, down from 4.0 percent estimated for 2025. The 2026 forecast has been downgraded by 2.4 portion points given that the January projections, showing the adverse impacts of the continuous conflict.

Saudi Arabia: Forecast was downgraded by 1.2 portion points considering 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 strongest among Gulf economies. United Arab Emirates: Growth forecast for the UAE has fallen by 2.7 portion points considering that January.

Qatar: Especially, growth forecast for the Qatari economy has seen a sharp decline of 11.0 percentage points given that January. The economy is now anticipated to tape-record a contraction of 5.7%, below an approximated growth of 5.3%, due to severe obstruction to melted gas products. Qatar is an essential gamer in the international energy market, with a worldwide market share of melted natural gas (LNG) supplies ranging between 20% and 21%.

Kuwait relies totally (100%) on the Strait of Hormuz to export its petroleum and derivatives. Closing the strait would suggest a total shutdown of the country's financial lifeline, immediately halting earnings inflows to the state budget plan. Bahrain: Development projection for Bahrain's economy has actually declined by 1.8 portion points because January.