Emerging Stock Market Patterns in 2026

Residential or commercial property rates have actually come under pressure after a duration of strong development, with current information from the Dubai Land Department showing a drop in home loan deals and cash sales. We think the threat of a long lasting migrant outflow and an extreme downturn in the genuine estate sector is low.

As a long lasting US-Iran deal takes shape, the fallout from the dispute has tightened up local financial conditions, exposing vulnerabilities through capital outflows, wider bond spreads, and weaker investor belief. Many GCC sovereigns carry fairly little financial obligation and funding risks are for that reason limited in the UAE, the reserve bank's liquidity management has relieved immediate concerns.

That said, Bahrain has actually had the ability to depend on assistance 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 considering that the war started. High-frequency fiscal data underscore the stress on regional public finances from the conflict.

ANSR July GCC PRs 50DR+

International Capital Opportunities within the GCC

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 profits and a surge in spending, especially on aids, reflecting contingency expenses connected to the local environment and a velocity of Vision 2030 spending. In Qatar, the crisis brought oil and gas profits to a stop, swelling the deficit spending to the biggest since 2017.

GCC inflation characteristics stay unequal, with food costs the primary source of upward pressure and inflation in this classification conditioning in Kuwait, Oman and Qatar. By contrast, food inflation stays fairly suppressed in Saudi Arabia, likely showing the mitigating impact of its bigger domestic food production base and greater supply-chain strength.

We continue to see price pressures as mostly transitory instead of indicative of a sustained inflationary cycle. Appropriately, we anticipate average inflation to ease to 2.1% y/y in 2027 as short-lived 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 till December, and local rate policies to follow match.

We expect Iran's GDP to shrink by 10.8% this year (we anticipate a 9.4% contraction 3 months ago). Oil production and exports, which supply vital profits and FX inflows, have been curtailed by the US naval blockade, while non-oil activity has been badly hit. 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 global economy after more than a years of civil war. We anticipate GDP development to typical 9.6% over 2026-2027, supported by restored investment, particularly in banking and energy, financial reforms, and the steady resuming of regional trade links.

International Investment Opportunities within the GCC

The World Bank has actually slashed its 2026 growth forecast for Middle East economies, saying total GDP growth in the area is anticipated 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 infrastructure, had disrupted markets, increased financial volatility, and damaged the 2026 development 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 Hardship Outlook forecasts that the region's aggregate (excluding the Iran) GDP development will decelerate to 1.8 percent in 2026, below 4.0 percent approximated for 2025. The 2026 forecast has actually been downgraded by 2.4 percentage points given that the January forecasts, reflecting the negative results of the ongoing dispute.

Saudi Arabia: Forecast was reduced by 1.2 portion points because January. Development is now anticipated 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 actually fallen by 2.7 portion points considering that January.

Qatar: Significantly, growth forecast for the Qatari economy has seen a sharp decrease of 11.0 portion points considering that January. The economy is now anticipated to tape-record a contraction of 5.7%, below an estimated growth of 5.3%, due to severe obstruction to liquefied gas products. Qatar is an essential gamer in the global energy market, with a worldwide market share of melted natural gas (LNG) materials varying in between 20% and 21%.

Kuwait relies completely (100%) on the Strait of Hormuz to export its crude oil and derivatives. Closing the strait would indicate a total shutdown of the country's monetary lifeline, instantly halting profits inflows to the state spending plan. Bahrain: Growth forecast for Bahrain's economy has actually decreased by 1.8 portion points considering that January.