Emerging Equity Trading Patterns in 2026

Residential or commercial property prices 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 deals and money sales. However, we believe the threat of a long lasting migrant outflow and a severe slump in the property sector is low.

As a long lasting US-Iran deal takes shape, the fallout from the conflict has actually tightened 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 financing threats are for that reason restricted in the UAE, the main bank's liquidity management has reduced instant issues.

That said, Bahrain has been able to rely on support from neighbours, including Saudi Arabia and the UAE, and it successfully raised $1bn from an oversubscribed sovereign bond sale this month, marking the very first offering from the area because the war started. High-frequency financial data underscore the pressure on local public financial resources from the conflict.

ANSR July GCC PRs 50DR+

Key Foreign Capital Prospects in the GCC Market

In Saudi Arabia, the budget deficit 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 costs, especially on subsidies, showing contingency outlays tied to the local environment and an acceleration of Vision 2030 spending. In Qatar, the crisis brought oil and gas earnings to a halt, swelling the deficit spending to the biggest considering that 2017.

GCC inflation dynamics remain unequal, with food rates the main source of upward pressure and inflation in this classification conditioning in Kuwait, Oman and Qatar. By contrast, food inflation remains relatively subdued in Saudi Arabia, most likely reflecting the mitigating effect of its bigger domestic food production base and higher supply-chain durability.

We continue to see price pressures as mainly temporal instead of a sign of a sustained inflationary cycle. Accordingly, we anticipate typical inflation to relieve to 2.1% y/y in 2027 as short-term supply-side pressures dissipate. With near-term inflation raised and transit through the Strait most likely set to resume slowly, we expect the US Federal Reserve to keep rate of interest on hold till December, and local rate policies to do the same.

We expect Iran's GDP to shrink by 10.8% this year (we forecast a 9.4% contraction three months ago). Oil production and exports, which offer vital profits and FX inflows, have been cut by the United States naval blockade, while non-oil activity has actually been severely hit. In Iraq, oil exports have 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 worldwide economy after more than a years of civil war. We anticipate GDP development to typical 9.6% over 2026-2027, supported by restored financial investment, particularly in banking and energy, monetary reforms, and the gradual resuming of regional trade links.

Positioning GCC Investments against 2026 Shifts

The World Bank has actually slashed its 2026 development projection for Middle East economies, saying general GDP development in the area 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 damage of energy and public facilities, had disrupted markets, increased financial 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 forecasts that the region's aggregate (omitting the Iran) GDP growth will decrease to 1.8 percent in 2026, below 4.0 percent estimated for 2025. The 2026 projection has actually been reduced by 2.4 portion points given that the January projections, showing the negative impacts of the ongoing conflict.

Saudi Arabia: Projection was downgraded by 1.2 percentage points since January. Growth is now expected to slow from 4.3% in 2025 to 3.1% in 2026, keeping in mind that Saudi Arabia's outlook remains the strongest amongst Gulf economies. United Arab Emirates: Growth forecast for the UAE has fallen by 2.7 percentage points since January.

Qatar: Notably, development projection for the Qatari economy has seen a sharp decrease of 11.0 percentage 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 serious blockage to melted gas materials. Qatar is a crucial player in the global energy market, with an international market share of melted natural gas (LNG) products ranging in between 20% and 21%.

Kuwait relies totally (100%) on the Strait of Hormuz to export its unrefined oil and derivatives. Closing the strait would imply a complete shutdown of the country's financial lifeline, right away halting income inflows to the state spending plan. Bahrain: Development forecast for Bahrain's economy has actually decreased by 1.8 portion points because January.