International Investment Opportunities across the GCC

Residential or commercial property rates have come under pressure after a duration of strong development, with recent information from the Dubai Land Department showing a drop in home mortgage transactions and cash sales. We believe the threat of a long lasting migrant outflow and an extreme slump in the real estate sector is low.

As a long lasting 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 financier sentiment. Most GCC sovereigns bring relatively little financial obligation and financing threats are therefore limited in the UAE, the main bank's liquidity management has minimized instant concerns.

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 very first offering from the region because the war started. High-frequency fiscal information underscore the pressure on local public finances from the dispute.

ANSR July GCC PRs 50DR+

Future-Proofing GCC Portfolios for 2026 Trends

In Saudi Arabia, the deficit spending more than doubled to SAR125.7 bn, or about 9% of GDP in Q1, driven by a decrease in oil revenue and a rise in spending, especially on subsidies, reflecting contingency investments connected to the regional environment and an acceleration of Vision 2030 costs. In Qatar, the crisis brought oil and gas earnings to a stop, swelling the budget plan deficit to the biggest considering that 2017.

GCC inflation characteristics remain uneven, with food costs the main source of upward pressure and inflation in this classification strengthening in Kuwait, Oman and Qatar. By contrast, food inflation stays relatively controlled in Saudi Arabia, likely reflecting the mitigating effect of its larger domestic food production base and higher supply-chain strength.

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

We expect 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 essential earnings and FX inflows, have actually been curtailed by the United States naval blockade, while non-oil activity has actually been significantly struck. In Iraq, oil exports have collapsed to a drip and we're anticipating GDP to contract 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 prepare for GDP growth to average 9.6% over 2026-2027, supported by restored investment, especially in banking and energy, monetary reforms, and the gradual resuming of local trade links.

Essential Capital Shifts in the Future

The World Bank has actually slashed its 2026 development projection for Middle East economies, stating overall GDP development in the region is expected to slow from an approximated 3.6% in January to 1.8% for 2026. The closure of the strategic Strait of Hormuz, and destruction of energy and public facilities, had interfered with markets, increased monetary volatility, and compromised the 2026 growth 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 region's aggregate (leaving out the Iran) GDP growth will decrease to 1.8 percent in 2026, down from 4.0 percent approximated for 2025. The 2026 forecast has been reduced by 2.4 percentage points because the January projections, showing the unfavorable results of the ongoing conflict.

Saudi Arabia: Forecast was downgraded by 1.2 percentage points considering that January. Development 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 strongest amongst Gulf economies. United Arab Emirates: Development projection for the UAE has fallen by 2.7 portion points because January.

Qatar: Notably, growth projection for the Qatari economy has actually seen a sharp decline of 11.0 portion points because January. The economy is now expected to tape a contraction of 5.7%, down from an approximated growth of 5.3%, due to severe obstruction to melted gas products. Qatar is a key player in the international energy market, with an international market share of melted natural gas (LNG) materials varying in between 20% and 21%.

Kuwait relies entirely (100%) on the Strait of Hormuz to export its unrefined oil and derivatives. Subsequently, closing the strait would indicate a complete shutdown of the country's monetary lifeline, immediately stopping earnings inflows to the state spending plan. Bahrain: Development projection for Bahrain's economy has decreased by 1.8 percentage points because January.