GCC Equity Trading Patterns in 2026

Risks are tilted to the downside. In the event of a prolonged dispute, the present effect on the region will be compoundedthrough raised energy and food rates, decreasing trade, tourism and remittances, increased fiscal pressures, and displacement. "The present crisis is a stark reminder of the work ahead for the area: not just to weather shocks, however to restore more durable economies with more powerful macroeconomic basics, innovate and enhance governance, buy infrastructure, and enhance employment-creating sectors," said.

With peace and the ideal action, countries can build the organizations, capabilities and competitive sectors that create chances for people." With this long-lasting vision in mind, the report takes a close look at the region's potential for industrial policy federal government actions to increase strategic company activity as a chauffeur of economic growth and job development.

ANSR July GCC PRs 50DR+

Federal governments in the area have actually adopted commercial policy at a high rate in the last years, often through sovereign wealth funds and state-owned enterprises, however the results have been mixed. The report highlights the important requirement for strong institutions and mindful targeting of policies. "As nations face the heavy toll of today conflict, it is very important to also not lose sight of the work needed for lasting peace and prosperity," said.

Evaluating GCC Market Resilience in 2026

Q2 2026: The ICAEW Economic Update Middle East, is a quarterly economic forecast for the region prepared straight for the finance profession. The GCC economy faces a significant contraction this year pending information of the US-Iran arrangement to end the war. We expect energy circulations, tourism and investor sentiment to slowly normalise as war interruptions diminish.

ANSR July GCC PRs 50DR+

The interim agreement in between the US and Iran is a substantial action towards reaching a full-blown offer. A full go back to normality in the Strait of Hormuz will likely require time, but the threat of a recession-inducing oil rate spike has actually decreased. International GDP is expected to grow by 2.4% this year, 0.2 ppt less than we forecasted three months ago, and 3.1% in 2027.

We forecast a 4.1% contraction in Middle East GDP this year (versus predicted 3.6% expansion before the war), greater than the decrease in the very first year of the Covid pandemic. Kuwait, Iran, Iraq and Qatar stick out as the hardest hit, owing to their inability to prevent the disturbance to regional shipping, war-driven facilities damage and tourist losses.

Our 2026 outlook for the GCC is weaker than 3 months earlier, with GDP forecast to contract by 2.4% compared to a 0.2% decrease predicted previously. We expect Oman and Saudi Arabia to be the least negatively affected by the fallout from the conflict, with both economies continuing to broaden this year.

The economic damage sustained in the last couple of months is significant. Saudi GDP data for Q1 revealed growth slowed to 3% y/y, with non-oil activities broadening by 2.9%, the weakest speed since the Covid pandemic. On a seasonally changed basis, GDP contracted 1.2% q/q, driven by a 6.8% fall in oil activities as the Strait of Hormuz disruption hit late in the quarter.

Assessing Regional Investment Potential in 2026

Aside from Oman, all GCC producers along with Iran and Iraq have suffered comprehensive oil and gas production losses since the start of the conflict. May information show local production almost cut in half from pre-war levels, with the decrease deepening relative to March and April. Rerouting efforts, including by Saudi Arabia through the East-West Pipeline and the UAE through the Habshan-Fujairah pipeline, have assisted prevent an even bigger plunge in output.

ANSR July GCC PRs 50DR+

However, we forecast GCC oil sector output to agreement by 14.5% this year, which will mark the steepest decline in numerous years. We then expect a 23.5% rebound next year, driven mainly by normalisation from a significantly depressed base. Oil rates have been unpredictable, relieving below $85 per barrel as the interim agreement was revealed.

In the medium term, we anticipate oil costs to be a little lower than our pre-war standard, as the UAE's departure from OPEC+ enables a steady boost in its output towards the 5mn barrel each day production target once trade normalises. Against this backdrop, the UAE will accelerate the building and construction of a new West-East pipeline that should double the capability of export through Fujairah.

The May PMI surveys reported output development reaching its greatest level in 3 months, driven largely by enhanced domestic need. Nevertheless, they remain listed below long-run averages, with weak export orders and cost pressures from higher material and transport expenses are a common theme. Overall, we expect a 1.1% contraction in GCC non-energy sectors this year (compared to 4.2% development pre-war) and a progressive healing over the remainder of the decade.