International Investment Opportunities across the GCC

Property rates have actually come under pressure after a duration of strong growth, with current information from the Dubai Land Department revealing a drop in home mortgage transactions and money sales. We believe the danger of an enduring migrant outflow and an extreme decline in the genuine estate sector is low.

As an enduring US-Iran deal takes shape, the fallout from the conflict has tightened up regional financial conditions, exposing vulnerabilities through capital outflows, wider bond spreads, and weaker financier belief. The majority of GCC sovereigns bring relatively little debt and funding dangers are for that reason restricted in the UAE, the main bank's liquidity management has actually alleviated instant issues.

That said, Bahrain has had the ability to count on support from neighbours, including Saudi Arabia and the UAE, and it successfully raised $1bn from an oversubscribed sovereign bond sale this month, marking the first offering from the area since the war started. High-frequency fiscal data underscore the strain on local public financial resources from the conflict.

ANSR July GCC PRs 50DR+

International Investment Prospects across the GCC

In Saudi Arabia, the budget plan deficit more than doubled to SAR125.7 bn, or about 9% of GDP in Q1, driven by a decline in oil income and a rise in spending, particularly on aids, showing contingency investments connected to the local environment and an acceleration of Vision 2030 spending. In Qatar, the crisis brought oil and gas earnings to a stop, swelling the budget plan deficit to the largest given that 2017.

GCC inflation dynamics remain unequal, with food rates the primary source of upward pressure and inflation in this category fortifying in Kuwait, Oman and Qatar. By contrast, food inflation stays relatively controlled in Saudi Arabia, most likely reflecting the mitigating effect of its bigger domestic food production base and higher supply-chain strength.

We continue to view cost pressures as mostly temporal instead of a sign of a continual inflationary cycle. Accordingly, we anticipate average inflation to alleviate to 2.1% y/y in 2027 as temporary supply-side pressures dissipate. With near-term inflation elevated and transit through the Strait most likely set to resume gradually, we anticipate the United States Federal Reserve to keep rate of interest on hold till 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 earnings and FX inflows, have been reduced by the US naval blockade, while non-oil activity has been significantly hit. In Iraq, oil exports have collapsed to a trickle 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 years of civil war. We prepare for GDP development to average 9.6% over 2026-2027, supported by renewed financial investment, particularly in banking and energy, monetary reforms, and the progressive reopening of local trade links.

Accelerating Economic Growth through Global Diversification

The World Bank has slashed its 2026 growth forecast for Middle East economies, stating total GDP development in the area 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 disrupted markets, increased financial 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 Poverty Outlook anticipates that the area's aggregate (omitting the Iran) GDP development will decelerate to 1.8 percent in 2026, down from 4.0 percent estimated for 2025. The 2026 projection has been reduced by 2.4 portion points considering that the January forecasts, reflecting the negative effects of the ongoing conflict.

Saudi Arabia: Projection was reduced by 1.2 percentage points since 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 remains the greatest amongst Gulf economies. United Arab Emirates: Development forecast for the UAE has fallen by 2.7 percentage points given that January.

Qatar: Notably, development projection for the Qatari economy has actually seen a sharp decline of 11.0 portion points because January. The economy is now expected to record a contraction of 5.7%, below an approximated development of 5.3%, due to serious obstruction to melted gas materials. Qatar is an essential player in the global energy market, with a worldwide market share of melted gas (LNG) supplies ranging in between 20% and 21%.

Kuwait relies entirely (100%) on the Strait of Hormuz to export its crude oil and derivatives. Closing the strait would suggest a complete shutdown of the country's monetary lifeline, right away stopping profits inflows to the state budget. Bahrain: Development forecast for Bahrain's economy has decreased by 1.8 portion points given that January.