Middle East Stock Trading Trends in 2026

Property rates have actually come under pressure after a period of strong growth, with current data from the Dubai Land Department revealing a drop in mortgage transactions and cash sales. Nonetheless, we think the danger of a lasting migrant outflow and an extreme decline in the real estate sector is low.

As a long lasting US-Iran deal takes shape, the fallout from the conflict has actually tightened local monetary conditions, exposing vulnerabilities through capital outflows, larger bond spreads, and weaker investor sentiment. Many GCC sovereigns carry fairly little debt and funding risks are therefore limited in the UAE, the main bank's liquidity management has actually reduced immediate issues.

That said, Bahrain has been able to rely on support 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 given that the war started. High-frequency financial data highlight the pressure on regional public financial resources from the dispute.

ANSR July GCC PRs 50DR+

Future Business Landscape in the GCC

In Saudi Arabia, the budget plan deficit more than doubled to SAR125.7 bn, or about 9% of GDP in Q1, driven by a decrease in oil revenue and a surge in spending, particularly on aids, showing contingency investments tied to the local environment and an acceleration of Vision 2030 costs. In Qatar, the crisis brought oil and gas earnings to a stop, swelling the deficit spending to the largest because 2017.

GCC inflation dynamics remain irregular, with food rates the primary source of upward pressure and inflation in this classification fortifying in Kuwait, Oman and Qatar. By contrast, food inflation remains fairly controlled in Saudi Arabia, likely showing the mitigating effect of its bigger domestic food production base and higher supply-chain resilience.

We continue to view rate pressures as largely transitory rather than indicative of a sustained inflationary cycle. Accordingly, we anticipate average inflation to reduce to 2.1% y/y in 2027 as short-lived supply-side pressures dissipate. With near-term inflation elevated and transit through the Strait likely set to resume gradually, we expect the United States Federal Reserve to keep rates of interest on hold up until December, and local rate policies to do the same.

We expect Iran's GDP to shrink by 10.8% this year (we forecast a 9.4% contraction 3 months ago). Oil production and exports, which offer vital revenue and FX inflows, have been curtailed by the US marine blockade, while non-oil activity has been badly hit. In Iraq, oil exports have collapsed to a drip and we're forecasting GDP to contract 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 development to typical 9.6% over 2026-2027, supported by renewed investment, particularly in banking and energy, monetary reforms, and the progressive reopening of regional trade links.

Key Economic Diversification in 2026

The World Bank has slashed its 2026 development forecast for Middle East economies, stating total GDP growth in the region 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 actually interrupted markets, increased financial volatility, and weakened 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 area's aggregate (leaving out the Iran) GDP development will decelerate to 1.8 percent in 2026, down from 4.0 percent estimated for 2025. The 2026 projection has actually been reduced by 2.4 portion points because the January forecasts, reflecting the adverse effects of the continuous dispute.

Saudi Arabia: Projection was reduced by 1.2 percentage points given that January. Growth is now expected to slow from 4.3% in 2025 to 3.1% in 2026, noting that Saudi Arabia's outlook stays the greatest among Gulf economies. United Arab Emirates: Development projection for the UAE has actually fallen by 2.7 percentage points because January.

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

Kuwait relies entirely (100%) on the Strait of Hormuz to export its petroleum and derivatives. Closing the strait would indicate a total shutdown of the country's monetary lifeline, right away halting earnings inflows to the state budget plan. Bahrain: Development projection for Bahrain's economy has actually declined by 1.8 portion points given that January.