GCC Stock Market Patterns for 2026

Risks are slanted to the drawback. In case of a prolonged dispute, the present impacts on the region will be compoundedthrough elevated energy and food costs, decreasing trade, tourism and remittances, increased financial pressures, and displacement. "The existing crisis is a stark tip of the work ahead for the region: not only to weather shocks, however to rebuild more resilient economies with stronger macroeconomic fundamentals, innovate and enhance governance, buy infrastructure, and boost employment-creating sectors," said.

With peace and the ideal action, countries can develop the organizations, capabilities and competitive sectors that create chances for people." With this long-lasting vision in mind, the report takes a close appearance at the region's capacity for industrial policy government actions to increase strategic company activity as a chauffeur of financial development and job development.

ANSR July GCC PRs 50DR+

Governments in the area have actually adopted commercial policy at a high rate in the last years, frequently through sovereign wealth funds and state-owned business, however the outcomes have been mixed. The report highlights the critical need for strong organizations and careful targeting of policies. "As countries deal with the heavy toll of today dispute, it is essential to also not lose sight of the work needed for lasting peace and success," stated.

Navigating Investment Diversification in a Global Economy

Q2 2026: The ICAEW Economic Update Middle East, is a quarterly financial forecast for the region prepared directly for the finance profession. The GCC economy faces a significant contraction this year pending details of the US-Iran contract to end the war. We anticipate energy flows, tourist and financier belief to gradually normalise as war disturbances go away.

ANSR July GCC PRs 50DR+

The interim agreement between the US and Iran is a significant action towards reaching a full-blown offer. A full go back to normality in the Strait of Hormuz will likely require time, but the danger of a recession-inducing oil price spike has decreased. Global GDP is anticipated to grow by 2.4% this year, 0.2 ppt less than we projected 3 months back, and 3.1% in 2027.

We anticipate a 4.1% contraction in Middle East GDP this year (versus predicted 3.6% expansion before the war), higher than the decrease in the first year of the Covid pandemic. Kuwait, Iran, Iraq and Qatar stand apart as the hardest struck, owing to their failure to avoid the disruption to local shipping, war-driven infrastructure damage and tourist losses.

Our 2026 outlook for the GCC is weaker than three months back, with GDP projection to contract by 2.4% compared to a 0.2% decrease predicted formerly. We anticipate Oman and Saudi Arabia to be the least adversely affected by the fallout from the conflict, with both economies continuing to expand this year.

The economic damage incurred in the last few months is substantial. Saudi GDP information for Q1 revealed growth slowed to 3% y/y, with non-oil activities expanding by 2.9%, the weakest speed given that the Covid pandemic. On a seasonally adjusted basis, GDP contracted 1.2% q/q, driven by a 6.8% fall in oil activities as the Strait of Hormuz disturbance hit late in the quarter.

Future Middle Eastern Economic Projections

Aside from Oman, all GCC producers in addition to Iran and Iraq have suffered substantial oil and gas production losses since the start of the conflict. May information reveal regional production almost halved from pre-war levels, with the decline deepening relative to March and April. Rerouting efforts, including by Saudi Arabia through the East-West Pipeline and the UAE through the Habshan-Fujairah pipeline, have helped 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 a number of years. We then anticipate a 23.5% rebound next year, driven mainly by normalisation from a significantly depressed base. Oil costs have been unstable, reducing below $85 per barrel as the interim contract was revealed.

In the medium term, we expect oil rates to be a little lower than our pre-war standard, as the UAE's departure from OPEC+ allows for a steady boost in its output towards the 5mn barrel per day production target when trade normalises. Versus this backdrop, the UAE will accelerate the building and construction of a brand-new West-East pipeline that should double the capacity of export through Fujairah.

The May PMI surveys reported output growth reaching its strongest level in three months, driven mostly by improved domestic need. However, they stay below long-run averages, with weak export orders and rate pressures from greater material and transportation costs are a common style. In general, we expect a 1.1% contraction in GCC non-energy sectors this year (compared to 4.2% development pre-war) and a steady recovery over the rest of the decade.