Emerging Stock Market Trends for 2026

Residential or commercial property rates have come under pressure after a period of strong growth, with current data from the Dubai Land Department revealing a drop in home mortgage deals and cash sales. We think the danger of a lasting migrant outflow and an extreme recession in the genuine estate sector is low.

As a lasting US-Iran offer takes shape, the fallout from the dispute has actually tightened up local monetary conditions, exposing vulnerabilities through capital outflows, wider bond spreads, and weaker investor belief. Most GCC sovereigns carry reasonably little debt and funding risks are therefore limited in the UAE, the central bank's liquidity management has actually eased instant concerns.

That said, Bahrain has had the ability to rely on assistance from neighbours, consisting of Saudi Arabia and the UAE, and it effectively 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 information highlight the strain on regional public finances from the conflict.

ANSR July GCC PRs 50DR+

Future Business Climate in Arabia

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 earnings and a rise in spending, especially on subsidies, reflecting contingency investments tied to the local environment and a velocity of Vision 2030 costs. In Qatar, the crisis brought oil and gas income to a stop, swelling the deficit spending to the largest given that 2017.

GCC inflation characteristics stay uneven, with food rates the main source of upward pressure and inflation in this classification fortifying in Kuwait, Oman and Qatar. By contrast, food inflation stays fairly suppressed in Saudi Arabia, likely reflecting the mitigating effect of its larger domestic food production base and greater supply-chain durability.

We continue to see rate pressures as mainly transitory rather than indicative of a sustained inflationary cycle. Accordingly, we expect average inflation to alleviate to 2.1% y/y in 2027 as temporary 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 up until December, and regional rate policies to do the same.

We anticipate Iran's GDP to diminish by 10.8% this year (we forecast a 9.4% contraction three months ago). Oil production and exports, which provide necessary profits and FX inflows, have been reduced by the United States naval blockade, while non-oil activity has been badly hit. In Iraq, oil exports have actually collapsed to a drip 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 global economy after more than a years of civil war. We prepare for GDP development to typical 9.6% over 2026-2027, supported by renewed financial investment, particularly in banking and energy, financial reforms, and the gradual resuming of regional trade links.

Securing Middle East Portfolios for 2026 Shifts

The World Bank has slashed its 2026 growth 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 facilities, had actually 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 Poverty Outlook forecasts that the area's aggregate (leaving out the Iran) GDP growth will decelerate to 1.8 percent in 2026, down from 4.0 percent approximated for 2025. The 2026 projection has been reduced by 2.4 portion points considering that the January forecasts, showing the adverse impacts of the ongoing conflict.

Saudi Arabia: Forecast was downgraded by 1.2 portion points considering that January. Development is now expected 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: Growth projection for the UAE has fallen by 2.7 portion points considering that January.

Qatar: Significantly, development forecast for the Qatari economy has actually seen a sharp decrease of 11.0 percentage points considering that January. The economy is now expected to tape a contraction of 5.7%, below an estimated development of 5.3%, due to serious obstruction to melted gas supplies. Qatar is an essential player in the worldwide energy market, with a worldwide market share of liquefied gas (LNG) supplies ranging in between 20% and 21%.

Kuwait relies completely (100%) on the Strait of Hormuz to export its unrefined oil and derivatives. Closing the strait would suggest a complete shutdown of the country's monetary lifeline, instantly halting earnings inflows to the state budget plan. Bahrain: Growth projection for Bahrain's economy has actually declined by 1.8 portion points because January.