International Capital Opportunities within the GCC

Residential or commercial property rates have come under pressure after a period of strong development, with recent information from the Dubai Land Department revealing a drop in mortgage deals and money sales. We believe the danger of a lasting migrant outflow and a severe recession in the real estate sector is low.

As a lasting US-Iran deal takes shape, the fallout from the dispute has tightened local financial conditions, exposing vulnerabilities through capital outflows, broader bond spreads, and weaker investor belief. Most GCC sovereigns carry fairly little debt and funding dangers are for that reason limited in the UAE, the reserve bank's liquidity management has eased instant issues.

That stated, Bahrain has been able to rely on support from neighbours, consisting of Saudi Arabia and the UAE, and it effectively raised $1bn from an oversubscribed sovereign bond sale this month, marking the first offering from the area given that the war began. High-frequency fiscal information highlight the stress on local public finances from the dispute.

ANSR July GCC PRs 50DR+

Global Investment Opportunities across the Middle East

In Saudi Arabia, the deficit spending more than doubled to SAR125.7 bn, or about 9% of GDP in Q1, driven by a decline in oil revenue and a surge 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 revenue to a stop, swelling the budget deficit to the largest given that 2017.

GCC inflation dynamics stay unequal, with food rates the primary source of upward pressure and inflation in this classification conditioning in Kuwait, Oman and Qatar. By contrast, food inflation remains reasonably subdued in Saudi Arabia, most likely showing the mitigating result of its larger domestic food production base and greater supply-chain strength.

We continue to see rate pressures as largely temporal instead of a sign of a sustained inflationary cycle. Appropriately, we anticipate typical inflation to relieve to 2.1% y/y in 2027 as momentary supply-side pressures dissipate. With near-term inflation elevated and transit through the Strait likely set to resume gradually, we anticipate the US Federal Reserve to keep interest rates on hold till December, and regional rate policies to follow suit.

We anticipate Iran's GDP to diminish by 10.8% this year (we forecast a 9.4% contraction 3 months ago). Oil production and exports, which offer vital income and FX inflows, have actually been reduced by the US marine blockade, while non-oil activity has actually been significantly struck. 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 international economy after more than a decade of civil war. We expect GDP growth 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.

How Economic Shifts Can Shape GCC Markets

The World Bank has slashed its 2026 growth projection for Middle East economies, saying total GDP growth in the region is anticipated to slow from an estimated 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 interrupted markets, increased monetary volatility, and compromised 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 Hardship Outlook forecasts that the region's aggregate (excluding the Iran) GDP growth will decrease to 1.8 percent in 2026, down from 4.0 percent approximated for 2025. The 2026 projection has been devalued by 2.4 portion points because the January forecasts, showing the unfavorable results of the continuous dispute.

Saudi Arabia: Forecast was downgraded by 1.2 portion points given that January. Growth is now expected to slow from 4.3% in 2025 to 3.1% in 2026, noting that Saudi Arabia's outlook stays the strongest amongst Gulf economies. United Arab Emirates: Development forecast for the UAE has actually fallen by 2.7 portion points since January.

Qatar: Notably, development forecast for the Qatari economy has actually seen a sharp decrease of 11.0 portion points since January. The economy is now expected to record a contraction of 5.7%, down from an approximated development of 5.3%, due to severe blockage to liquefied gas products. Qatar is a key player in the worldwide energy market, with an international market share of liquefied natural gas (LNG) materials varying in between 20% and 21%.

Kuwait relies completely (100%) on the Strait of Hormuz to export its petroleum and derivatives. Subsequently, closing the strait would indicate a total shutdown of the nation's monetary lifeline, instantly halting income inflows to the state budget plan. Bahrain: Development projection for Bahrain's economy has declined by 1.8 percentage points given that January.