Foreign Investment Opportunities across the GCC

Home prices have actually come under pressure after a duration of strong development, with current data from the Dubai Land Department showing a drop in mortgage deals and money sales. Nevertheless, we think the threat of an enduring migrant outflow and an extreme slump in the realty sector is low.

As a long lasting US-Iran deal takes shape, the fallout from the conflict has tightened local monetary conditions, exposing vulnerabilities through capital outflows, larger bond spreads, and weaker financier belief. The majority of GCC sovereigns bring reasonably little financial obligation and financing threats are for that reason limited in the UAE, the main bank's liquidity management has eased immediate concerns.

That stated, Bahrain has been able to depend on support from neighbours, including Saudi Arabia and the UAE, and it effectively raised $1bn from an oversubscribed sovereign bond sale this month, marking the first offering from the region given that the war began. High-frequency fiscal information highlight the stress on local public financial resources from the conflict.

ANSR July GCC PRs 50DR+

Key Foreign Investment Avenues for the GCC Region

In Saudi Arabia, the spending plan deficit more than doubled to SAR125.7 bn, or about 9% of GDP in Q1, driven by a decline in oil income and a rise in spending, especially on subsidies, reflecting contingency expenses tied to the local environment and an acceleration of Vision 2030 costs. In Qatar, the crisis brought oil and gas profits to a stop, swelling the deficit spending to the biggest given that 2017.

GCC inflation dynamics stay irregular, with food prices the primary source of upward pressure and inflation in this classification conditioning in Kuwait, Oman and Qatar. By contrast, food inflation stays relatively subdued in Saudi Arabia, likely showing the mitigating impact of its bigger domestic food production base and higher supply-chain resilience.

We continue to view cost pressures as mainly transitory rather than a sign of a sustained inflationary cycle. Accordingly, we expect typical inflation to reduce to 2.1% y/y in 2027 as short-lived supply-side pressures dissipate. With near-term inflation raised and transit through the Strait likely set to resume gradually, we anticipate the US Federal Reserve to keep rate of interest on hold until December, and local rate policies to follow fit.

We anticipate 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 essential revenue and FX inflows, have been curtailed by the US marine blockade, while non-oil activity has actually been badly struck. 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 worldwide economy after more than a decade of civil war. We prepare for GDP development to typical 9.6% over 2026-2027, supported by restored investment, particularly in banking and energy, monetary reforms, and the progressive reopening of regional trade links.

International Capital Prospects across the Middle East

The World Bank has slashed its 2026 development forecast for Middle East economies, saying general GDP development in the area is anticipated to slow from an estimated 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 deteriorated the 2026 growth 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 Poverty Outlook forecasts that the region's aggregate (excluding the Iran) GDP growth will decrease to 1.8 percent in 2026, down from 4.0 percent estimated for 2025. The 2026 forecast has actually been devalued by 2.4 portion points given that the January forecasts, reflecting the negative effects of the ongoing conflict.

Saudi Arabia: Forecast was devalued by 1.2 percentage points since January. Growth is now anticipated to slow from 4.3% in 2025 to 3.1% in 2026, noting that Saudi Arabia's outlook remains the greatest amongst Gulf economies. United Arab Emirates: Growth forecast for the UAE has fallen by 2.7 percentage points since January.

Qatar: Notably, growth forecast for the Qatari economy has seen a sharp decline of 11.0 portion points considering that January. The economy is now anticipated to tape a contraction of 5.7%, down from an approximated growth of 5.3%, due to extreme blockage to melted gas materials. Qatar is a crucial player in the global energy market, with an international market share of melted natural gas (LNG) materials ranging in between 20% and 21%.

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