Global Capital Opportunities across the GCC

Risks are slanted to the disadvantage. In case of an extended conflict, the current effects on the region will be compoundedthrough elevated energy and food rates, decreasing trade, tourist and remittances, increased financial pressures, and displacement. "The existing crisis is a plain pointer of the work ahead for the area: not just to weather shocks, however to rebuild more resistant economies with more powerful macroeconomic principles, innovate and improve governance, invest in facilities, and enhance employment-creating sectors," said.

With peace and the ideal action, countries can develop the organizations, abilities and competitive sectors that produce chances for individuals." With this long-lasting vision in mind, the report takes a close appearance at the area's capacity for industrial policy government actions to increase strategic company activity as a driver of financial growth and task creation.

ANSR July GCC PRs 50DR+

Governments in the area have embraced industrial policy at a high rate in the last decade, typically through sovereign wealth funds and state-owned business, but the results have actually been blended. The report highlights the critical requirement for strong institutions and cautious targeting of policies. "As nations deal with the heavy toll of the present dispute, it is necessary to also not forget the work needed for long-lasting peace and prosperity," stated.

Top International Capital Prospects in the GCC Region

Q2 2026: The ICAEW Economic Update Middle East, is a quarterly economic projection for the area prepared straight for the financing profession. The GCC economy faces a significant contraction this year pending details of the US-Iran agreement to end the war. We anticipate energy flows, tourist and investor belief to gradually normalise as war disturbances decrease.

ANSR July GCC PRs 50DR+

The interim agreement between the United States and Iran is a considerable action towards reaching a full-blown deal. A complete go back to normality in the Strait of Hormuz will likely require time, but the risk of a recession-inducing oil cost spike has decreased. Worldwide GDP is anticipated to grow by 2.4% this year, 0.2 ppt less than we projected 3 months back, 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 first year of the Covid pandemic. Kuwait, Iran, Iraq and Qatar stand out as the hardest struck, owing to their failure to avoid the interruption to local shipping, war-driven infrastructure damage and tourist losses.

Our 2026 outlook for the GCC is weaker than 3 months ago, with GDP forecast to contract by 2.4% compared to a 0.2% decrease predicted formerly. We anticipate Oman and Saudi Arabia to be the least adversely impacted by the fallout from the conflict, with both economies continuing to expand this year.

The financial damage incurred in the last few months is considerable. Saudi GDP information for Q1 showed development slowed to 3% y/y, with non-oil activities expanding by 2.9%, the weakest rate given that the Covid pandemic. On a seasonally adjusted 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.

Analyzing GCC Investment Resilience for 2026

Aside from Oman, all GCC manufacturers along with Iran and Iraq have actually suffered comprehensive oil and gas production losses because the start of the dispute. Might data show local production nearly halved from pre-war levels, with the decline deepening relative to March and April. Rerouting efforts, consisting of by Saudi Arabia through the East-West Pipeline and the UAE through the Habshan-Fujairah pipeline, have actually helped prevent an even bigger plunge in output.

ANSR July GCC PRs 50DR+

We forecast GCC oil sector output to agreement by 14.5% this year, which will mark the steepest decline in several decades. We then anticipate a 23.5% rebound next year, driven mainly by normalisation from a significantly depressed base. Oil prices have been unpredictable, reducing below $85 per barrel as the interim contract was revealed.

In the medium term, we expect oil costs to be somewhat lower than our pre-war standard, as the UAE's departure from OPEC+ enables a steady increase in its output towards the 5mn barrel each day production target as soon as trade normalises. Versus this backdrop, the UAE will speed up the construction of a brand-new West-East pipeline that must double the capacity of export through Fujairah.

The May PMI surveys reported output development reaching its strongest level in 3 months, driven largely by improved domestic demand. They remain listed below long-run averages, with weak export orders and cost pressures from greater material and transportation costs are a typical theme. In general, we expect a 1.1% contraction in GCC non-energy sectors this year (compared to 4.2% growth pre-war) and a gradual recovery over the remainder of the decade.