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To reverse a years of damaging total element productivity, local labour market policy is shifting from easy task creation to managing active labor force transitions. Governments and employers are scaling short, modular training programmes and micro-credentials in information analytics and digital operations to equip workers for emerging functions. Workplace-based learning and apprenticeship-style pathways are ending up being more typical as companies incorporate AI tools into daily workflows.
With oil rates forecasted to average $55-60 per barrel in 2026, local governments are heightening their focus on expenditure discipline and personal capital mobilisation. Financial policy is pivoting towards the monetisation of state-owned properties in logistics, energies, and desalination to redirect funds towards higher-impact financial investments. While loaning by means of sukuk and sustainability-linked bonds is expected to increase to fund strategic deficits, the focus remains on strengthening non-oil revenue frameworks.
PwC Middle East economic policy and strategy partner Jing Teow said: "Having already mobilised capital and policy at scale, GCC governments are now concentrated on shipment. In 2026, the concern is reinforcing economic durability through more safe and secure trade and financial investment relationships, effective AI release, handled workforce transitions and disciplined fiscal policy in a more challenging and fragmented global environment.".
Saudi Arabia and UAE are poised to lead the Gulf area's economic expansion in 2026, supported by strong private-sector efficiency, resilient domestic need and restored investment momentum, according to the current ICAEW Economic Insight Q4 2025 report, produced by Oxford Economics. The GCC is anticipated to outshine most worldwide areas peers next year, with local GDP projection to grow by 4.4%. Throughout the GCC, non-energy activity is projected to broaden by 4.1% in 2026, driven by strong labour markets, enhancing credit conditions and rising financial investment in innovation and AI-related infrastructure.
Oil earnings will be under pressure in the very first half of 2026, production is anticipated to rise again in the second half of 2026, supporting the area's medium-term outlook, it mentioned. Saudi Arabia will remain a significant contributor to GCC momentum, with GDP forecast to grow 4.3% in 2026.
Development will be supported by industrial expansion and policy reforms, consisting of eased foreign ownership rules that intend to promote additional investment. The financial deficit is forecasted to widen to 5.6% of GDP next year amid softer oil costs, while the recent five-year rent freeze in Riyadh aims to alleviate inflationary pressures, though it might constrain future housing supply.
Strong domestic fundamentalsThe UAE is also positioned for another strong year of efficiency, with GDP projection to increase 5.6% in 2026 as non-oil sectors continue to expand. Tourism, trade and monetary services remain essential growth chauffeurs, supported by population growth and sustained domestic need. Dubai's economy grew 4.4% in the first half of 2025, showing broad-based non-oil strength.
Oil production is anticipated to get again in the second half of 2026, matching continuous financial investment in facilities, technology and worldwide trade partnerships. Hanadi Khalife, the Head of Middle East, ICAEW, said: "This quarter's outlook strengthens how far the GCC has come in structure varied, durable and globally competitive economies.
Leading the 2026 Regional Economic Environment for ExecutivesScott Livermore, ICAEW Economic Advisor, and Chief Economist and Managing Director, Oxford Economics Middle East, stated: "Saudi Arabia and the UAE are entering 2026 with strong structures. Saudi non-oil activity is acquiring speed, supported by robust need and increasing investment, even as financial pressures increase.""The UAE continues to benefit from strong domestic basics, a sharp uplift in government costs and sustained diversification efforts.
Leading the 2026 Regional Economic Environment for ExecutivesWhat differentiates 2026 from preceding years is not simply the velocity of technological modification, though that acceleration is real, but rather an essential shift in how business conceive of their GCCs' function. The is anticipated to grow to four hundred thirteen billion dollars by 2040, but this growth masks a more extensive transformation.
Instead, they ask whether these centers drive innovation, own profit-and-loss responsibility, and contribute to competitive distinction. In 2026, the most effective GCCs will behave like internal startups, nimble, cross-functional, insight-driven, and deeply lined up with global service outcomes. This shift from execution to ownership represents possibly the single most considerable tactical recalibration in the GCC model's development.
Today, we're convening more than 3000 meetings between financiers and 119 Gulf-listed companies with a combined worth of $2.4 trillion at the HSBC GCC Exchanges Conference 2026, in London. We're uniting investors, companies, exchanges, and policymakers to discuss what is altering in the area, and what comes next, consisting of the growth and continuous development of the Gulf's capital markets, and the area's growing role in worldwide networks of capital and trade.
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