Essential Stock Capital Insights for GCC Investors

Risks are slanted to the drawback. In case of an extended dispute, the present influence on the area will be compoundedthrough raised energy and food rates, decreasing trade, tourism and remittances, increased fiscal pressures, and displacement. "The present crisis is a plain reminder of the work ahead for the region: not only to weather shocks, but to rebuild more resilient economies with more powerful macroeconomic basics, innovate and enhance governance, purchase infrastructure, and boost employment-creating sectors," stated.

With peace and the best action, nations can construct the organizations, capabilities and competitive sectors that develop opportunities for people." With this long-lasting vision in mind, the report takes a close look at the area's potential for commercial policy federal government actions to increase strategic service activity as a driver of financial development and job production.

ANSR July GCC PRs 50DR+

Federal governments in the region have actually embraced commercial policy at a high rate in the last decade, frequently through sovereign wealth funds and state-owned enterprises, but the outcomes have actually been mixed. The report highlights the crucial requirement for strong organizations and mindful targeting of policies. "As nations deal with the heavy toll of today conflict, it is very important to also not forget the work needed for long-lasting peace and prosperity," said.

GCC Stock Market Trends for 2026

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

ANSR July GCC PRs 50DR+

The interim agreement between the United States and Iran is a substantial step towards reaching a full-blown offer. A full return to normality in the Strait of Hormuz will likely take some time, however the risk of a recession-inducing oil cost spike has declined. Global GDP is anticipated to grow by 2.4% this year, 0.2 ppt less than we forecasted three months back, and 3.1% in 2027.

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

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

The financial damage sustained in the last couple of months is considerable. Saudi GDP information for Q1 revealed growth slowed to 3% y/y, with non-oil activities expanding by 2.9%, the weakest rate considering 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 disruption struck late in the quarter.

Evaluating Regional Market Resilience for 2026

Aside from Oman, all GCC manufacturers as well as Iran and Iraq have suffered substantial oil and gas production losses since the start of the dispute. Might data show local production almost 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 helped prevent an even larger 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 severely depressed base. Meanwhile, oil rates have been unstable, easing listed below $85 per barrel as the interim arrangement was announced.

In the medium term, we expect oil costs to be a little lower than our pre-war standard, as the UAE's departure from OPEC+ enables a steady boost in its output towards the 5mn barrel each day production target once trade normalises. Against this backdrop, 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 three months, driven largely by improved domestic demand. However, they remain below long-run averages, with weak export orders and rate pressures from higher material and transportation expenses are a common theme. Overall, we expect a 1.1% contraction in GCC non-energy sectors this year (compared to 4.2% growth pre-war) and a progressive healing over the remainder of the years.