Essential Capital Expansion for 2026

Property rates have actually come under pressure after a period of strong growth, with recent information from the Dubai Land Department showing a drop in home loan transactions and cash sales. Nevertheless, we think the danger of a long lasting migrant outflow and an extreme recession in the realty sector is low.

As a lasting US-Iran deal takes shape, the fallout from the dispute has actually tightened up regional monetary conditions, exposing vulnerabilities through capital outflows, larger bond spreads, and weaker investor sentiment. A lot of GCC sovereigns bring relatively little financial obligation and funding risks are for that reason restricted in the UAE, the main bank's liquidity management has actually relieved instant issues.

That stated, Bahrain has actually been able to rely 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 region considering that the war started. High-frequency fiscal data underscore the strain on local public financial resources from the dispute.

ANSR July GCC PRs 50DR+

Key Stock Capital Insights for GCC Growth

In Saudi Arabia, the budget deficit more than doubled to SAR125.7 bn, or about 9% of GDP in Q1, driven by a decrease in oil earnings and a surge in spending, especially on aids, showing contingency outlays tied to the regional environment and a velocity of Vision 2030 spending. In Qatar, the crisis brought oil and gas profits to a stop, swelling the spending plan deficit to the biggest given that 2017.

GCC inflation dynamics remain unequal, with food rates the primary source of upward pressure and inflation in this category conditioning in Kuwait, Oman and Qatar. By contrast, food inflation stays fairly suppressed in Saudi Arabia, most likely reflecting the mitigating result of its bigger domestic food production base and higher supply-chain durability.

We continue to see rate pressures as mostly transitory instead of indicative of a sustained inflationary cycle. Accordingly, we expect average inflation to reduce to 2.1% y/y in 2027 as short-term supply-side pressures dissipate. With near-term inflation elevated and transit through the Strait likely set to resume slowly, we anticipate the US Federal Reserve to keep interest rates on hold until December, and local rate policies to follow match.

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 supply vital earnings and FX inflows, have actually been curtailed by the United States naval blockade, while non-oil activity has actually been badly hit. In Iraq, oil exports have collapsed to a trickle and we're forecasting 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 worldwide economy after more than a years of civil war. We prepare for GDP growth to average 9.6% over 2026-2027, supported by renewed investment, especially in banking and energy, monetary reforms, and the steady reopening of regional trade links.

Foreign Capital Opportunities within the GCC

The World Bank has slashed its 2026 development projection for Middle East economies, stating overall GDP development in the area 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 infrastructure, had actually interrupted markets, increased financial volatility, and damaged 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 Poverty Outlook forecasts that the region's aggregate (excluding the Iran) GDP development will decelerate to 1.8 percent in 2026, below 4.0 percent estimated for 2025. The 2026 projection has been downgraded by 2.4 portion points considering that the January projections, showing the unfavorable effects of the ongoing conflict.

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

Qatar: Especially, growth forecast for the Qatari economy has actually seen a sharp decrease of 11.0 percentage points because January. The economy is now expected to record a contraction of 5.7%, below an estimated growth of 5.3%, due to serious obstruction to liquefied gas materials. Qatar is an essential gamer in the international energy market, with an international market share of liquefied natural gas (LNG) materials ranging in between 20% and 21%.

Kuwait relies entirely (100%) on the Strait of Hormuz to export its unrefined oil and derivatives. Subsequently, closing the strait would imply a total shutdown of the country's monetary lifeline, immediately stopping income inflows to the state spending plan. Bahrain: Development forecast for Bahrain's economy has actually declined by 1.8 percentage points given that January.