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To reverse a years of weakening overall factor productivity, local labour market policy is shifting from simple job production to managing active workforce shifts. Federal governments and employers are scaling short, modular training programs and micro-credentials in data analytics and digital operations to equip workers for emerging functions. Workplace-based knowing and apprenticeship-style pathways are ending up being more typical as firms integrate AI tools into day-to-day workflows.
With oil costs anticipated to average $55-60 per barrel in 2026, regional federal governments are heightening their focus on expenditure discipline and private capital mobilisation. Financial policy is pivoting towards the monetisation of state-owned possessions in logistics, energies, and desalination to redirect funds towards higher-impact investments. While loaning via sukuk and sustainability-linked bonds is expected to increase to fund tactical deficits, the focus stays on reinforcing non-oil income frameworks.
PwC Middle East economic policy and strategy partner Jing Teow stated: "Having already mobilised capital and policy at scale, GCC governments are now focused on shipment. In 2026, the priority is strengthening financial durability through more safe trade and investment relationships, reliable AI deployment, managed labor force shifts and disciplined financial policy in a more challenging and fragmented global environment.".
Saudi Arabia and UAE are poised to lead the Gulf area's economic growth in 2026, supported by strong private-sector efficiency, durable domestic demand and restored investment momentum, according to the most recent ICAEW Economic Insight Q4 2025 report, produced by Oxford Economics. The GCC is expected to outperform most international areas peers next year, with local GDP projection to grow by 4.4%. Across the GCC, non-energy activity is projected to broaden by 4.1% in 2026, driven by strong labour markets, improving credit conditions and rising investment in technology and AI-related facilities.
Oil incomes will be under pressure in the very first half of 2026, production is anticipated to rise once again in the second half of 2026, supporting the region's medium-term outlook, it mentioned. Saudi Arabia will stay a major contributor to GCC momentum, with GDP forecast to grow 4.3% in 2026.
Growth will be supported by industrial growth and policy reforms, consisting of alleviated foreign ownership guidelines that intend to promote additional investment. The fiscal deficit is predicted to expand to 5.6% of GDP next year amid softer oil costs, while the recent five-year rent freeze in Riyadh aims to reduce inflationary pressures, though it might constrain future real estate supply.
Strong domestic fundamentalsThe UAE is also positioned for another strong year of efficiency, with GDP forecast to rise 5.6% in 2026 as non-oil sectors continue to broaden. Tourism, trade and financial services remain key development motorists, supported by population development and continual domestic need. Dubai's economy grew 4.4% in the first half of 2025, showing broad-based non-oil strength.
Oil production is expected to get again in the 2nd half of 2026, complementing ongoing financial investment in facilities, technology and worldwide trade partnerships. Hanadi Khalife, the Head of Middle East, ICAEW, said: "This quarter's outlook enhances how far the GCC has actually come in building diverse, durable and internationally competitive economies.
Scott Livermore, ICAEW Economic Consultant, and Chief Economist and Handling Director, Oxford Economics Middle East, stated: "Saudi Arabia and the UAE are entering 2026 with strong foundations. Saudi non-oil activity is gaining pace, supported by robust need and increasing financial investment, even as financial pressures increase.""The UAE continues to take advantage of strong domestic fundamentals, a sharp uplift in government spending and continual diversity efforts.
Reviewing 2026 GCC Data for Future InsightsWhat differentiates 2026 from preceding years is not merely the velocity of technological modification, though that velocity is real, however rather a basic shift in how business conceive of their GCCs' purpose. The is expected to grow to 4 hundred thirteen billion dollars by 2040, however this development masks a more profound change.
Rather, they ask whether these centers drive development, own profit-and-loss duty, and add to competitive distinction. In 2026, the most successful GCCs will act like internal startups, agile, cross-functional, insight-driven, and deeply aligned with global service results. This shift from execution to ownership represents perhaps the single most considerable tactical recalibration in the GCC model's advancement.
This week, we're assembling more than 3000 meetings between investors and 119 Gulf-listed companies with a combined worth of $2.4 trillion at the HSBC GCC Exchanges Conference 2026, in London. We're bringing together financiers, companies, exchanges, and policymakers to discuss what is altering in the region, and what comes next, consisting of the growth and ongoing development of the Gulf's capital markets, and the region's growing role in international networks of capital and trade.
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