GCC Stock Market Patterns for 2026

Dangers are slanted to the downside. In case of an extended dispute, the present effects on the region will be compoundedthrough raised energy and food prices, declining trade, tourist and remittances, increased financial pressures, and displacement. "The present crisis is a stark suggestion of the work ahead for the area: not only to weather shocks, however to restore more durable economies with stronger macroeconomic principles, innovate and enhance governance, invest in facilities, and boost employment-creating sectors," stated.

With peace and the ideal action, countries can build the organizations, abilities and competitive sectors that create opportunities for individuals." With this long-term vision in mind, the report takes a close appearance at the area's potential for commercial policy government actions to increase strategic business activity as a driver of financial development and job development.

ANSR July GCC PRs 50DR+

Federal governments in the area have actually embraced commercial policy at a high rate in the last decade, typically through sovereign wealth funds and state-owned enterprises, but the outcomes have actually been blended. The report highlights the important need for strong institutions and careful targeting of policies. "As nations face the heavy toll of the present dispute, it is essential to also not forget the work needed for lasting peace and prosperity," said.

Essential Capital Diversification in the Future

Q2 2026: The ICAEW Economic Update Middle East, is a quarterly economic projection for the region prepared directly for the finance profession. The GCC economy faces a marked contraction this year pending details of the US-Iran contract to end the war. We expect energy flows, tourist and financier belief to slowly normalise as war disturbances diminish.

ANSR July GCC PRs 50DR+

The interim agreement in between the US and Iran is a substantial action towards reaching a full-blown deal. A complete go back to normality in the Strait of Hormuz will likely take some time, but the threat of a recession-inducing oil cost spike has actually decreased. Worldwide GDP is expected 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), greater than the decline in the first year of the Covid pandemic. Kuwait, Iran, Iraq and Qatar stand apart as the hardest hit, owing to their inability to prevent the disruption to regional shipping, war-driven infrastructure damage and tourist losses.

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

The financial damage sustained in the last few 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 rate 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.

GCC Stock Market Trends for 2026

Aside from Oman, all GCC manufacturers along with Iran and Iraq have actually suffered substantial oil and gas production losses since the start of the conflict. May information show regional production nearly halved from pre-war levels, with the decrease 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 larger plunge in output.

ANSR July GCC PRs 50DR+

Nonetheless, we anticipate GCC oil sector output to contract 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 mostly by normalisation from a significantly depressed base. On the other hand, oil rates have actually been unpredictable, easing listed below $85 per barrel as the interim agreement was announced.

In the medium term, we anticipate oil prices to be somewhat lower than our pre-war standard, as the UAE's departure from OPEC+ enables for a progressive increase in its output towards the 5mn barrel daily production target as soon as trade normalises. Against this background, the UAE will speed up the construction of a brand-new West-East pipeline that must double the capacity of export through Fujairah.

The May PMI surveys reported output development reaching its strongest level in three months, driven largely by improved domestic demand. They remain listed below long-run averages, with weak export orders and price pressures from greater product and transport costs are a typical theme. Overall, we anticipate 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 years.