GCC corporates set for steady 2026 as capex offsets oil price pressure – Fitch

GCC corporate fundamentals are expected to remain broadly stable in 2026, underpinned by continued government-led capital expenditure even as softer oil prices weigh on fiscal flexibility, according to Fitch Ratings.

In its latest GCC Corporates Outlook 2026, the ratings agency maintained a neutral stance for the year ahead, citing largely unchanged operating conditions across the region.

Ongoing public sector investment, particularly in infrastructure and energy, is expected to support steady earnings for companies, while diversification programmes in Saudi Arabia and the UAE continue to channel funding into non-energy sectors such as tourism, logistics and manufacturing.

Fitch forecasts non-oil GDP growth across the GCC at 3.7 per cent in 2026, slightly below the 4.2 per cent recorded previously but still supportive of corporate activity. Regulatory reforms aimed at broadening economic bases are also expected to underpin a robust pipeline of IPOs, supported by deep local capital markets and policy backing.

GCC firms navigate lower oil prices

The agency cautioned, however, that lower oil price assumptions, with Brent forecast to average around $63 a barrel in 2026, will constrain both public- and private-sector budgets. While prices remain above fiscal breakeven levels for most GCC producers, reduced fiscal headroom could limit the pace of new spending in some markets.

Corporate balance sheets are expected to remain resilient overall, with around 95 per cent of Fitch-rated GCC issuers carrying stable outlooks. Leverage is projected to edge up modestly in 2026 as companies step up capital spending, particularly in energy, utilities and real estate, but refinancing risks are seen as manageable. Many issuers have pushed out debt maturities to beyond 2027, reducing near-term funding pressure.

Fitch noted that higher funding costs and shrinking leverage headroom will pose greater challenges for more cyclical and highly leveraged sectors, including industrials, retail and some homebuilders. By contrast, national oil companies are expected to continue generating strong cash flows due to low lifting costs and disciplined capital allocation.

Debt capital market activity is also expected to remain active in 2026, with corporates tapping both bond and sukuk markets to fund expansion and manage liabilities. Sukuk is likely to remain the preferred funding instrument for many issuers, supported by sustained demand from regional Islamic banks and institutional investors.

Overall, Fitch said the combination of public sector investment, diversification reforms and stable operating environments should allow GCC corporates to navigate lower oil prices while maintaining broadly steady performance through 2026.