Key Equity Capital Insights for Regional Investors

Threats are slanted to the drawback. In the occasion of an extended conflict, the present influence on the region will be compoundedthrough elevated energy and food costs, decreasing trade, tourist and remittances, increased fiscal pressures, and displacement. "The present crisis is a plain tip of the work ahead for the region: not just to weather shocks, however to restore more durable economies with stronger macroeconomic principles, innovate and improve governance, buy infrastructure, and improve employment-creating sectors," stated.

With peace and the ideal action, countries can build the organizations, capabilities and competitive sectors that create opportunities for people." With this long-term vision in mind, the report takes a close take a look at the region's potential for industrial policy federal government actions to increase strategic company activity as a driver of financial growth and task creation.

ANSR July GCC PRs 50DR+

Governments in the region have embraced commercial policy at a high rate in the last years, often through sovereign wealth funds and state-owned business, but the outcomes have been blended. The report highlights the critical need for strong organizations and careful targeting of policies. "As nations face the heavy toll of today dispute, it is crucial to likewise not forget the work needed for lasting peace and success," said.

Securing GCC Portfolios for 2026 Trends

Q2 2026: The ICAEW Economic Update Middle East, is a quarterly financial projection for the area prepared straight for the finance occupation. The GCC economy faces a marked contraction this year pending details of the US-Iran arrangement to end the war. We anticipate energy circulations, tourism and investor belief to gradually normalise as war interruptions go away.

ANSR July GCC PRs 50DR+

The interim contract in between the United States and Iran is a significant action towards reaching a full-blown offer. A complete return to normality in the Strait of Hormuz will likely take time, however the risk of a recession-inducing oil price spike has declined. Worldwide GDP is anticipated to grow by 2.4% this year, 0.2 ppt less than we forecasted three months earlier, 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 stand apart as the hardest struck, owing to their inability to prevent the disruption to regional shipping, war-driven facilities damage and tourism losses.

Our 2026 outlook for the GCC is weaker than 3 months earlier, with GDP projection to contract by 2.4% compared to a 0.2% decrease forecasted formerly. We anticipate Oman and Saudi Arabia to be the least negatively affected by the fallout from the dispute, with both economies continuing to broaden this year.

The financial damage incurred 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 disruption struck late in the quarter.

Future Regional Market Outlook

Aside from Oman, all GCC manufacturers in addition to Iran and Iraq have suffered extensive oil and gas production losses since the start of the dispute. Might information show local production almost cut in half 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 actually assisted prevent an even bigger plunge in output.

ANSR July GCC PRs 50DR+

Nevertheless, we forecast 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 largely by normalisation from a severely depressed base. Oil costs have been volatile, easing below $85 per barrel as the interim agreement was announced.

In the medium term, we expect oil costs to be a little lower than our pre-war baseline, as the UAE's departure from OPEC+ permits a gradual boost in its output towards the 5mn barrel per day production target when trade normalises. Against this backdrop, the UAE will accelerate the building of a new West-East pipeline that must double the capability of export through Fujairah.

The May PMI studies reported output growth reaching its greatest level in 3 months, driven mainly by enhanced domestic demand. They stay listed below long-run averages, with weak export orders and cost pressures from greater product and transportation expenses are a common style. In general, we anticipate a 1.1% contraction in GCC non-energy sectors this year (compared to 4.2% development pre-war) and a steady healing over the rest of the years.