Future GCC Financial Projections

Residential or commercial property costs have come under pressure after a period of strong growth, with recent data from the Dubai Land Department showing a drop in mortgage transactions and money sales. Nevertheless, we believe the threat of a long lasting migrant outflow and a serious slump in the real estate sector is low.

As an enduring US-Iran deal takes shape, the fallout from the dispute has tightened regional monetary conditions, exposing vulnerabilities through capital outflows, broader bond spreads, and weaker investor sentiment. Most GCC sovereigns bring reasonably little financial obligation and financing threats are therefore restricted in the UAE, the reserve bank's liquidity management has eased immediate concerns.

That said, Bahrain has actually had the ability to rely on support from neighbours, consisting of Saudi Arabia and the UAE, and it successfully raised $1bn from an oversubscribed sovereign bond sale this month, marking the first offering from the region given that the war started. High-frequency financial data underscore the stress on local public finances from the conflict.

ANSR July GCC PRs 50DR+

Optimizing Wealth Diversification in a 2026 Economy

In Saudi Arabia, the spending plan deficit more than doubled to SAR125.7 bn, or about 9% of GDP in Q1, driven by a decline in oil earnings and a rise in costs, particularly on subsidies, showing contingency outlays tied to the regional environment and an acceleration of Vision 2030 costs. In Qatar, the crisis brought oil and gas profits to a halt, swelling the spending plan deficit to the largest because 2017.

GCC inflation characteristics stay uneven, 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 reasonably controlled in Saudi Arabia, most likely reflecting the mitigating impact of its bigger domestic food production base and greater supply-chain resilience.

We continue to view price pressures as mostly temporal instead of indicative of a continual inflationary cycle. Appropriately, we expect typical inflation to alleviate 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 rate of interest on hold till December, and local rate policies to follow suit.

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 important revenue and FX inflows, have actually been cut by the US marine blockade, while non-oil activity has actually been severely struck. 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 decade of civil war. We anticipate GDP development to average 9.6% over 2026-2027, supported by renewed investment, particularly in banking and energy, monetary reforms, and the progressive resuming of regional trade links.

2026 Investment Landscape in Arabia

The World Bank has actually slashed its 2026 growth forecast for Middle East economies, saying overall GDP growth in the region is expected to slow from an approximated 3.6% in January to 1.8% for 2026. The closure of the tactical Strait of Hormuz, and destruction of energy and public infrastructure, had actually interrupted markets, increased monetary volatility, and deteriorated the 2026 development outlook, the World Bank Group said in its Economic Update for the Middle East, North Africa, Afghanistan and Pakistan.

The April 2026 World Bank's Macro Poverty Outlook anticipates that the area's aggregate (excluding the Iran) GDP development will decelerate to 1.8 percent in 2026, down from 4.0 percent approximated for 2025. The 2026 projection has actually been downgraded by 2.4 portion points considering that the January forecasts, reflecting the adverse impacts of the ongoing conflict.

Saudi Arabia: Projection was reduced by 1.2 percentage points because 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 stays the greatest among Gulf economies. United Arab Emirates: Development projection for the UAE has actually fallen by 2.7 portion points since January.

Qatar: Notably, growth forecast for the Qatari economy has actually seen a sharp decline of 11.0 percentage points because January. The economy is now anticipated to tape a contraction of 5.7%, below an approximated development of 5.3%, due to severe blockage to melted gas supplies. Qatar is an essential gamer in the international energy market, with a global market share of melted gas (LNG) products varying in between 20% and 21%.

Kuwait relies totally (100%) on the Strait of Hormuz to export its crude oil and derivatives. Closing the strait would indicate a total shutdown of the country's monetary lifeline, immediately halting income inflows to the state spending plan. Bahrain: Development projection for Bahrain's economy has actually declined by 1.8 percentage points given that January.