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To reverse a decade of deteriorating overall factor efficiency, local labour market policy is moving from simple task development to handling active labor force shifts. Governments and employers are scaling short, modular training programmes and micro-credentials in data analytics and digital operations to gear up workers for emerging roles. Workplace-based knowing and apprenticeship-style paths are becoming more common as companies integrate AI tools into daily workflows.
With oil prices forecasted to average $55-60 per barrel in 2026, regional federal governments are intensifying their focus on expense discipline and private capital mobilisation. Financial policy is pivoting towards the monetisation of state-owned properties in logistics, utilities, and desalination to reroute funds toward higher-impact investments. While borrowing via sukuk and sustainability-linked bonds is expected to increase to fund strategic deficits, the focus stays on enhancing non-oil earnings structures.
PwC Middle East financial policy and strategy partner Jing Teow said: "Having currently mobilised capital and policy at scale, GCC federal governments are now focused on delivery. In 2026, the priority is reinforcing financial resilience through more protected trade and investment relationships, efficient AI implementation, handled labor force shifts and disciplined financial policy in a more tough and fragmented worldwide environment.".
Saudi Arabia and UAE are poised to lead the Gulf region's economic expansion in 2026, supported by strong private-sector performance, resistant domestic demand and renewed investment momentum, according to the current ICAEW Economic Insight Q4 2025 report, produced by Oxford Economics. The GCC is expected to outperform most worldwide regions peers next year, with regional GDP projection to grow by 4.4%. Across the GCC, non-energy activity is predicted to expand by 4.1% in 2026, driven by strong labour markets, enhancing credit conditions and rising investment in innovation and AI-related facilities.
Oil profits will be under pressure in the first half of 2026, production is expected to rise once again in the second half of 2026, supporting the area's medium-term outlook, it specified. Saudi Arabia will remain a significant contributor to GCC momentum, with GDP forecast to grow 4.3% in 2026.
Growth will be supported by commercial growth and policy reforms, including relieved foreign ownership rules that aim to promote further financial investment. The financial deficit is forecasted to expand to 5.6% of GDP next year amidst softer oil costs, while the current five-year rent freeze in Riyadh aims to alleviate inflationary pressures, though it might constrain future real estate supply.
Strong domestic fundamentalsThe UAE is likewise placed for another strong year of performance, with GDP forecast to rise 5.6% in 2026 as non-oil sectors continue to expand. Tourist, trade and financial services remain key growth motorists, supported by population growth and sustained domestic need. Dubai's economy grew 4.4% in the very first half of 2025, reflecting broad-based non-oil strength.
Oil production is anticipated to get once again in the second half of 2026, complementing ongoing financial investment in facilities, innovation and global trade collaborations. Hanadi Khalife, the Head of Middle East, ICAEW, said: "This quarter's outlook reinforces how far the GCC has been available in building varied, durable and globally competitive economies.
Is Your Outsourcing Company Ready for the 2026 Transition?Scott Livermore, ICAEW Economic Advisor, and Chief Financial Expert and Handling Director, Oxford Economics Middle East, stated: "Saudi Arabia and the UAE are entering 2026 with strong structures. Saudi non-oil activity is getting speed, supported by robust need and increasing financial 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.
The Ultimate Strategy for Entering Emerging Saudi CentersWhat distinguishes 2026 from preceding years is not merely the velocity of technological change, though that acceleration is genuine, however rather an essential shift in how business develop of their GCCs' function. The is expected to grow to 4 hundred thirteen billion dollars by 2040, but this growth masks a more profound improvement.
Rather, they ask whether these centers drive innovation, own profit-and-loss responsibility, and contribute to competitive distinction. In 2026, the most successful GCCs will behave like internal startups, agile, cross-functional, insight-driven, and deeply lined up with global organization outcomes. This shift from execution to ownership represents maybe the single most significant tactical recalibration in the GCC design's evolution.
Today, we're assembling more than 3000 meetings in 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 bringing together investors, business, exchanges, and policymakers to discuss what is changing in the area, 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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