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To reverse a decade of compromising overall element productivity, local labour market policy is moving from basic task creation to handling active labor force shifts. Federal governments and employers are scaling short, modular training programmes and micro-credentials in information analytics and digital operations to gear up workers for emerging roles. Workplace-based learning and apprenticeship-style paths are ending up being more common as companies incorporate AI tools into day-to-day workflows.
With oil costs anticipated to average $55-60 per barrel in 2026, local federal governments are heightening their concentrate on expenditure discipline and personal capital mobilisation. Fiscal policy is rotating towards the monetisation of state-owned possessions in logistics, utilities, and desalination to redirect funds toward higher-impact financial investments. While borrowing through sukuk and sustainability-linked bonds is anticipated to increase to money tactical deficits, the focus stays on strengthening non-oil earnings structures.
PwC Middle East economic policy and method partner Jing Teow said: "Having already mobilised capital and policy at scale, GCC federal governments are now focused on delivery. In 2026, the priority is strengthening financial durability through more safe and secure trade and investment relationships, efficient AI release, handled labor force transitions and disciplined financial policy in a more difficult and fragmented international environment.".
Saudi Arabia and UAE are poised to lead the Gulf region's financial growth in 2026, supported by strong private-sector efficiency, resistant domestic demand and renewed financial investment momentum, according to the most recent ICAEW Economic Insight Q4 2025 report, produced by Oxford Economics. The GCC is expected to exceed most global regions peers next year, with local GDP forecast to grow by 4.4%. Across the GCC, non-energy activity is forecasted to broaden by 4.1% in 2026, driven by strong labour markets, enhancing credit conditions and increasing financial investment in innovation and AI-related infrastructure.
Oil incomes will be under pressure in the 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 specified. Saudi Arabia will remain a major factor to GCC momentum, with GDP forecast to grow 4.3% in 2026.
Development will be supported by industrial growth and policy reforms, including alleviated foreign ownership guidelines that aim to stimulate more investment. The fiscal deficit is projected to expand to 5.6% of GDP next year amidst softer oil costs, while the current five-year rent freeze in Riyadh aims to ease inflationary pressures, though it may constrain future real estate supply.
Strong domestic fundamentalsThe UAE is also placed for another strong year of performance, with GDP projection to increase 5.6% in 2026 as non-oil sectors continue to expand. Tourist, trade and financial services remain crucial development drivers, supported by population development and sustained domestic demand. Dubai's economy grew 4.4% in the very first half of 2025, reflecting broad-based non-oil strength.
Oil production is anticipated to pick up again in the second half of 2026, complementing ongoing financial investment in infrastructure, innovation and worldwide trade collaborations. Hanadi Khalife, the Head of Middle East, ICAEW, said: "This quarter's outlook reinforces how far the GCC has actually been available in building varied, resilient and worldwide competitive economies.
Rethinking Supplier Partnerships for Greater GCC Operational AgilityScott Livermore, ICAEW Economic Advisor, and Chief Economist and Managing Director, Oxford Economics Middle East, said: "Saudi Arabia and the UAE are entering 2026 with strong foundations. Saudi non-oil activity is getting rate, supported by robust demand and rising investment, even as financial pressures increase.""The UAE continues to take advantage of strong domestic principles, a sharp uplift in government spending and continual diversification efforts.
What differentiates 2026 from preceding years is not just the acceleration of technological change, though that acceleration is real, but rather a basic shift in how business develop of their GCCs' purpose. The is anticipated to grow to four hundred thirteen billion dollars by 2040, but this growth masks a more profound transformation.
Instead, they ask whether these centers drive development, own profit-and-loss responsibility, and contribute to competitive differentiation. In 2026, the most successful GCCs will behave like internal start-ups, agile, cross-functional, insight-driven, and deeply aligned with worldwide business results. This shift from execution to ownership represents maybe the single most considerable strategic recalibration in the GCC design's evolution.
This week, we're convening more than 3000 conferences between financiers and 119 Gulf-listed business with a combined value of $2.4 trillion at the HSBC GCC Exchanges Conference 2026, in London. We're bringing together investors, business, exchanges, and policymakers to discuss what is altering in the area, and what comes next, including the expansion and continuous advancement of the Gulf's capital markets, and the region's growing role in international networks of capital and trade.
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