Key Equity Capital Strategies for GCC Growth

Property rates have come under pressure after a period of strong growth, with recent data from the Dubai Land Department showing a drop in mortgage transactions and money sales. We believe the risk of an enduring migrant outflow and an extreme recession in the real estate sector is low.

As a lasting US-Iran deal takes shape, the fallout from the conflict has tightened regional financial conditions, exposing vulnerabilities through capital outflows, larger bond spreads, and weaker financier sentiment. Many GCC sovereigns bring fairly little debt and funding threats are for that reason restricted in the UAE, the reserve bank's liquidity management has eased instant issues.

That said, Bahrain has had the ability to depend on support 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 pressure on regional public financial resources from the conflict.

ANSR July GCC PRs 50DR+

Essential Stock Market Strategies for Regional Growth

In Saudi Arabia, the budget plan deficit more than doubled to SAR125.7 bn, or about 9% of GDP in Q1, driven by a decrease in oil income and a surge in costs, particularly on subsidies, showing contingency investments tied to the regional environment and an acceleration of Vision 2030 costs. In Qatar, the crisis brought oil and gas revenue to a halt, swelling the budget plan deficit to the biggest given that 2017.

GCC inflation dynamics stay unequal, with food prices the primary source of upward pressure and inflation in this category conditioning in Kuwait, Oman and Qatar. By contrast, food inflation stays relatively controlled in Saudi Arabia, likely showing the mitigating result of its larger domestic food production base and greater supply-chain durability.

We continue to view price pressures as mostly temporal instead of a sign of a continual inflationary cycle. Accordingly, we anticipate average inflation to relieve to 2.1% y/y in 2027 as short-lived supply-side pressures dissipate. With near-term inflation elevated and transit through the Strait most likely set to resume slowly, we expect the United States Federal Reserve to keep rate of interest on hold till December, and local rate policies to follow suit.

We expect Iran's GDP to shrink by 10.8% this year (we anticipate a 9.4% contraction 3 months ago). Oil production and exports, which offer important earnings and FX inflows, have actually been cut by the US naval blockade, while non-oil activity has been significantly hit. In Iraq, oil exports have collapsed to a drip 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 decade of civil war. We expect GDP growth to typical 9.6% over 2026-2027, supported by renewed financial investment, particularly in banking and energy, financial reforms, and the progressive reopening of regional trade links.

The Future Investment Climate of Arabia

The World Bank has slashed its 2026 development forecast for Middle East economies, stating general GDP development in the region is anticipated to slow from an approximated 3.6% in January to 1.8% for 2026. The closure of the strategic Strait of Hormuz, and damage of energy and public infrastructure, had actually interrupted markets, increased monetary volatility, and compromised 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 anticipates that the area's aggregate (excluding the Iran) GDP development will decrease to 1.8 percent in 2026, down from 4.0 percent estimated for 2025. The 2026 forecast has actually been reduced by 2.4 percentage points since the January projections, reflecting the negative impacts of the ongoing conflict.

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

Qatar: Significantly, development projection for the Qatari economy has seen a sharp decrease of 11.0 percentage points because January. The economy is now expected to tape-record a contraction of 5.7%, below an estimated development of 5.3%, due to severe blockage to liquefied gas supplies. Qatar is a crucial gamer in the international energy market, with an international market share of liquefied gas (LNG) materials varying in between 20% and 21%.

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