Middle East Stock Market Trends in 2026

Residential or commercial property rates have actually come under pressure after a period of strong growth, with current data from the Dubai Land Department showing a drop in home loan transactions and money sales. However, we believe the danger of a lasting migrant outflow and a serious recession in the realty sector is low.

As a long lasting US-Iran deal takes shape, the fallout from the dispute has tightened up local monetary conditions, exposing vulnerabilities through capital outflows, larger bond spreads, and weaker investor belief. Most GCC sovereigns bring reasonably little debt and financing dangers are for that reason limited in the UAE, the reserve bank's liquidity management has actually relieved instant concerns.

That stated, Bahrain has actually been able to depend on assistance from neighbours, consisting of 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 considering that the war started. High-frequency fiscal information highlight the stress on local public financial resources from the dispute.

ANSR July GCC PRs 50DR+

Optimizing Wealth Diversification in a Global Economy

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 costs, especially on subsidies, showing contingency investments tied to the local environment and an acceleration of Vision 2030 spending. In Qatar, the crisis brought oil and gas earnings to a stop, swelling the spending plan deficit to the largest given that 2017.

GCC inflation dynamics stay unequal, with food costs the main source of upward pressure and inflation in this classification conditioning in Kuwait, Oman and Qatar. By contrast, food inflation remains relatively suppressed in Saudi Arabia, most likely reflecting the mitigating impact of its larger domestic food production base and greater supply-chain resilience.

We continue to view cost pressures as largely transitory instead of indicative of a sustained inflationary cycle. Accordingly, we expect typical inflation to ease to 2.1% y/y in 2027 as momentary supply-side pressures dissipate. With near-term inflation raised and transit through the Strait likely set to resume slowly, we anticipate the United States Federal Reserve to keep rates of interest on hold up until December, and local rate policies to follow suit.

We expect Iran's GDP to diminish by 10.8% this year (we anticipate a 9.4% contraction 3 months ago). Oil production and exports, which provide essential profits and FX inflows, have actually been reduced by the United States naval blockade, while non-oil activity has actually been significantly hit. In Iraq, oil exports have actually collapsed to a drip and we're anticipating 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 expect GDP growth to typical 9.6% over 2026-2027, supported by renewed financial investment, especially in banking and energy, monetary reforms, and the steady reopening of local trade links.

Securing Middle East Portfolios for 2026 Shifts

The World Bank has actually slashed its 2026 growth projection for Middle East economies, saying overall GDP growth in the region is expected to slow from an estimated 3.6% in January to 1.8% for 2026. The closure of the tactical Strait of Hormuz, and damage of energy and public facilities, had interfered with markets, increased financial volatility, and weakened the 2026 growth outlook, the World Bank Group said in its Economic Update for the Middle East, North Africa, Afghanistan and Pakistan.

The April 2026 World Bank's Macro Hardship Outlook anticipates that the area's aggregate (omitting the Iran) GDP development will decrease to 1.8 percent in 2026, down from 4.0 percent estimated for 2025. The 2026 projection has been downgraded by 2.4 percentage points because the January forecasts, reflecting the adverse effects of the ongoing dispute.

Saudi Arabia: Forecast was reduced by 1.2 portion points since January. Growth is now expected to slow from 4.3% in 2025 to 3.1% in 2026, keeping in mind that Saudi Arabia's outlook stays the strongest amongst Gulf economies. United Arab Emirates: Growth projection for the UAE has fallen by 2.7 portion points given that January.

Qatar: Especially, development forecast for the Qatari economy has actually seen a sharp decline of 11.0 percentage points given that January. The economy is now anticipated to tape a contraction of 5.7%, below an estimated development of 5.3%, due to extreme blockage to liquefied gas products. Qatar is an essential player in the worldwide energy market, with a global market share of liquefied gas (LNG) materials ranging in between 20% and 21%.

Kuwait relies totally (100%) on the Strait of Hormuz to export its petroleum and derivatives. As a result, closing the strait would suggest a complete shutdown of the country's financial lifeline, right away stopping revenue inflows to the state budget. Bahrain: Growth forecast for Bahrain's economy has decreased by 1.8 portion points given that January.