GCC Stock Market Trends for 2026

Dangers are slanted to the drawback. In case of an extended dispute, the current effects on the region will be compoundedthrough raised energy and food costs, decreasing trade, tourist and remittances, increased fiscal pressures, and displacement. "The current crisis is a stark pointer of the work ahead for the region: not only to weather shocks, but to reconstruct more resistant economies with more powerful macroeconomic fundamentals, innovate and improve governance, purchase infrastructure, and improve employment-creating sectors," stated.

With peace and the right action, nations can construct the organizations, capabilities and competitive sectors that develop chances for individuals." With this long-lasting vision in mind, the report takes a close take a look at the area's capacity for industrial policy government actions to increase tactical company activity as a motorist of financial growth and task creation.

ANSR July GCC PRs 50DR+

Federal governments in the area have actually embraced commercial policy at a high rate in the last decade, often through sovereign wealth funds and state-owned business, but the outcomes have actually been blended. The report highlights the vital requirement for strong organizations and careful targeting of policies. "As countries deal with the heavy toll of the present dispute, it is very important to also not forget the work needed for lasting peace and success," said.

Emerging Equity Market Patterns for 2026

Q2 2026: The ICAEW Economic Update Middle East, is a quarterly financial forecast for the area prepared directly for the finance profession. The GCC economy deals with a marked contraction this year pending details of the US-Iran agreement to end the war. We anticipate energy flows, tourism and investor belief to slowly normalise as war disturbances diminish.

ANSR July GCC PRs 50DR+

The interim agreement in between the US and Iran is a significant step towards reaching a full-blown offer. A complete return to normality in the Strait of Hormuz will likely take some time, but the danger of a recession-inducing oil price spike has decreased. International GDP is expected to grow by 2.4% this year, 0.2 ppt less than we projected three months ago, and 3.1% in 2027.

We anticipate a 4.1% contraction in Middle East GDP this year (versus projected 3.6% growth before the war), greater than the decline in the first year of the Covid pandemic. Kuwait, Iran, Iraq and Qatar stick out as the hardest struck, owing to their inability to prevent the interruption to local shipping, war-driven facilities damage and tourist losses.

Our 2026 outlook for the GCC is weaker than 3 months ago, with GDP forecast to agreement by 2.4% compared to a 0.2% decrease predicted previously. We anticipate Oman and Saudi Arabia to be the least negatively affected by the fallout from the dispute, with both economies continuing to expand this year.

The financial damage incurred in the last couple of months is considerable. Saudi GDP data for Q1 revealed development slowed to 3% y/y, with non-oil activities broadening by 2.9%, the weakest speed because the Covid pandemic. On a seasonally changed basis, GDP contracted 1.2% q/q, driven by a 6.8% fall in oil activities as the Strait of Hormuz interruption struck late in the quarter.

Foreign Investment Opportunities across the Middle East

Aside from Oman, all GCC manufacturers along with Iran and Iraq have suffered comprehensive oil and gas production losses considering that the start of the dispute. May data reveal local production nearly halved from pre-war levels, with the decline deepening relative to March and April. Rerouting efforts, consisting of by Saudi Arabia through the East-West Pipeline and the UAE through the Habshan-Fujairah pipeline, have actually assisted avoid an even bigger plunge in output.

ANSR July GCC PRs 50DR+

We anticipate GCC oil sector output to agreement by 14.5% this year, which will mark the steepest decrease in numerous years. We then anticipate a 23.5% rebound next year, driven mainly by normalisation from a seriously depressed base. Meanwhile, oil prices have been unstable, reducing below $85 per barrel as the interim agreement was revealed.

In the medium term, we expect oil costs to be slightly lower than our pre-war standard, as the UAE's departure from OPEC+ enables a gradual increase in its output towards the 5mn barrel each day production target when trade normalises. Against this background, the UAE will accelerate the building of a new West-East pipeline that must double the capacity of export through Fujairah.

The May PMI surveys reported output growth reaching its greatest level in 3 months, driven mainly by enhanced domestic need. They remain listed below long-run averages, with weak export orders and price pressures from greater product and transportation expenses are a typical theme. In general, we expect a 1.1% contraction in GCC non-energy sectors this year (compared to 4.2% development pre-war) and a gradual healing over the remainder of the decade.