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To reverse a years of deteriorating overall factor efficiency, regional labour market policy is moving from basic task development to handling active labor force shifts. Governments and employers are scaling short, modular training programs and micro-credentials in data analytics and digital operations to gear up employees for emerging roles. Workplace-based learning and apprenticeship-style paths are becoming more typical as firms incorporate AI tools into everyday workflows.
With oil prices forecasted to average $55-60 per barrel in 2026, regional governments are magnifying their focus on expenditure discipline and personal capital mobilisation. Financial policy is pivoting towards the monetisation of state-owned properties in logistics, utilities, and desalination to redirect funds toward higher-impact investments. While borrowing via sukuk and sustainability-linked bonds is expected to increase to money tactical deficits, the focus remains on strengthening non-oil revenue frameworks.
PwC Middle East economic policy and strategy partner Jing Teow stated: "Having currently mobilised capital and policy at scale, GCC federal governments are now concentrated on delivery. In 2026, the priority is reinforcing financial durability through more safe trade and financial investment relationships, effective AI deployment, managed labor force shifts and disciplined financial policy in a more tough and fragmented global environment.".
Saudi Arabia and UAE are poised to lead the Gulf region's economic growth in 2026, supported by strong private-sector efficiency, durable domestic demand and renewed financial investment momentum, according to the current ICAEW Economic Insight Q4 2025 report, produced by Oxford Economics. The GCC is expected to surpass most international regions peers next year, with regional GDP forecast to grow by 4.4%. Throughout the GCC, non-energy activity is forecasted 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 expected to increase once again in the second half of 2026, supporting the region's medium-term outlook, it mentioned. Saudi Arabia will remain a major contributor to GCC momentum, with GDP projection to grow 4.3% in 2026.
Development will be supported by industrial expansion and policy reforms, consisting of eased foreign ownership rules that aim to stimulate additional financial investment. The financial deficit is predicted to expand to 5.6% of GDP next year amidst softer oil costs, while the recent five-year lease freeze in Riyadh aims to alleviate inflationary pressures, though it may constrain future real estate supply.
Strong domestic fundamentalsThe UAE is also positioned for another strong year of performance, with GDP forecast to rise 5.6% in 2026 as non-oil sectors continue to broaden. Tourist, trade and financial services remain key growth motorists, supported by population growth and continual domestic demand. Dubai's economy grew 4.4% in the first half of 2025, showing broad-based non-oil strength.
Oil production is anticipated to get once again in the second half of 2026, complementing continuous investment in facilities, technology and global trade partnerships. Hanadi Khalife, the Head of Middle East, ICAEW, said: "This quarter's outlook enhances how far the GCC has been available in structure varied, resilient and internationally competitive economies.
Ensuring Strategic Excellence in the Middle EastScott Livermore, ICAEW Economic Consultant, and Chief Economist and Handling Director, Oxford Economics Middle East, stated: "Saudi Arabia and the UAE are going into 2026 with strong structures. Saudi non-oil activity is gaining rate, supported by robust need and rising investment, even as fiscal pressures increase.""The UAE continues to gain from solid domestic basics, a sharp uplift in federal government costs and sustained diversification efforts.
Ensuring Strategic Excellence in the Middle EastWhat differentiates 2026 from preceding years is not simply the acceleration of technological modification, though that acceleration is genuine, but rather an essential shift in how business develop of their GCCs' function. The is expected to grow to four hundred thirteen billion dollars by 2040, however this development masks a more extensive change.
Rather, they ask whether these centers drive innovation, own profit-and-loss obligation, and add to competitive distinction. In 2026, the most effective GCCs will behave like internal startups, agile, cross-functional, insight-driven, and deeply aligned with international company results. This shift from execution to ownership represents maybe the single most significant strategic recalibration in the GCC model's evolution.
Today, we're assembling more than 3000 conferences between investors and 119 Gulf-listed companies with a combined value of $2.4 trillion at the HSBC GCC Exchanges Conference 2026, in London. We're combining financiers, business, exchanges, and policymakers to discuss what is changing in the region, and what comes next, including the expansion and ongoing development of the Gulf's capital markets, and the region's growing role in global networks of capital and trade.
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