Top Foreign Capital Prospects in the GCC Market

Residential or commercial property costs have come under pressure after a duration of strong development, with recent information from the Dubai Land Department showing a drop in home loan transactions and money sales. We believe the risk of an enduring migrant outflow and a serious decline in the genuine estate sector is low.

As a long lasting US-Iran offer takes shape, the fallout from the dispute has tightened up regional monetary conditions, exposing vulnerabilities through capital outflows, wider bond spreads, and weaker investor belief. The majority of GCC sovereigns carry relatively little financial obligation and financing dangers are for that reason restricted in the UAE, the reserve bank's liquidity management has actually reduced instant 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 very first offering from the region considering that the war began. High-frequency financial information highlight the strain on local public finances from the dispute.

ANSR July GCC PRs 50DR+

Mastering Wealth Diversification in a 2026 Economy

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 earnings and a surge in costs, especially on subsidies, reflecting contingency expenses tied to the regional environment and an acceleration of Vision 2030 costs. In Qatar, the crisis brought oil and gas profits to a stop, swelling the spending plan deficit to the biggest considering that 2017.

GCC inflation characteristics stay irregular, with food prices the main source of upward pressure and inflation in this category fortifying in Kuwait, Oman and Qatar. By contrast, food inflation stays relatively subdued in Saudi Arabia, most likely reflecting the mitigating result of its bigger domestic food production base and greater supply-chain resilience.

We continue to see cost pressures as mainly transitory instead of indicative of a continual inflationary cycle. Accordingly, we anticipate average inflation to reduce to 2.1% y/y in 2027 as momentary supply-side pressures dissipate. With near-term inflation raised and transit through the Strait most likely set to resume gradually, we anticipate the US Federal Reserve to keep interest rates on hold up until December, and local rate policies to do the same.

We anticipate Iran's GDP to shrink by 10.8% this year (we anticipate a 9.4% contraction three months ago). Oil production and exports, which offer essential income and FX inflows, have actually been curtailed by the US marine blockade, while non-oil activity has been significantly struck. In Iraq, oil exports have actually 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 international economy after more than a decade of civil war. We expect GDP growth to average 9.6% over 2026-2027, supported by renewed financial investment, particularly in banking and energy, financial reforms, and the progressive resuming of regional trade links.

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The World Bank has actually slashed its 2026 growth projection for Middle East economies, saying total GDP development in the area is anticipated to slow from an estimated 3.6% in January to 1.8% for 2026. The closure of the strategic Strait of Hormuz, and destruction of energy and public infrastructure, had actually disrupted markets, increased financial volatility, and compromised the 2026 growth 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 forecasts that the area's aggregate (excluding the Iran) GDP growth will decelerate to 1.8 percent in 2026, down from 4.0 percent estimated for 2025. The 2026 projection has been downgraded by 2.4 percentage points given that the January projections, reflecting the negative results of the ongoing conflict.

Saudi Arabia: Projection was downgraded by 1.2 portion points given that January. Growth is now anticipated 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: Growth forecast for the UAE has actually fallen by 2.7 percentage points because January.

Qatar: Significantly, growth forecast for the Qatari economy has seen a sharp decrease of 11.0 percentage points because January. The economy is now anticipated to tape-record a contraction of 5.7%, down from an approximated development of 5.3%, due to serious obstruction to liquefied gas products. Qatar is a key gamer in the worldwide energy market, with a worldwide market share of melted gas (LNG) materials varying between 20% and 21%.

Kuwait relies completely (100%) on the Strait of Hormuz to export its petroleum and derivatives. Consequently, closing the strait would imply a complete shutdown of the nation's financial lifeline, immediately stopping earnings inflows to the state budget. Bahrain: Development projection for Bahrain's economy has decreased by 1.8 percentage points given that January.