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To reverse a years of deteriorating total factor productivity, local labour market policy is moving from easy job production to managing active workforce shifts. Governments and employers are scaling short, modular training programmes and micro-credentials in information analytics and digital operations to gear up workers for emerging functions. Workplace-based knowing and apprenticeship-style paths are becoming more typical as firms incorporate AI tools into daily workflows.
With oil rates forecasted to average $55-60 per barrel in 2026, local federal governments are heightening their focus on expenditure discipline and personal capital mobilisation. Fiscal policy is rotating towards the monetisation of state-owned possessions in logistics, energies, and desalination to reroute funds toward higher-impact financial investments. While loaning by means of sukuk and sustainability-linked bonds is anticipated to increase to fund strategic deficits, the focus remains on strengthening non-oil profits structures.
PwC Middle East economic policy and strategy partner Jing Teow said: "Having currently mobilised capital and policy at scale, GCC federal governments are now focused on shipment. In 2026, the priority is strengthening economic strength through more safe trade and investment relationships, effective AI release, handled labor force transitions and disciplined fiscal policy in a more tough and fragmented worldwide environment.".
Saudi Arabia and UAE are poised to lead the Gulf region's economic growth in 2026, supported by strong private-sector efficiency, resilient domestic need and renewed investment momentum, according to the newest 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 forecast to grow by 4.4%. Throughout the GCC, non-energy activity is predicted to expand by 4.1% in 2026, driven by strong labour markets, improving credit conditions and increasing investment in technology and AI-related infrastructure.
Oil earnings will be under pressure in the first half of 2026, production is expected to rise again in the 2nd half of 2026, supporting the region's medium-term outlook, it stated. Saudi Arabia will remain a significant factor to GCC momentum, with GDP forecast to grow 4.3% in 2026.
Development will be supported by industrial expansion and policy reforms, consisting of relieved foreign ownership guidelines that intend to stimulate further financial investment. The fiscal deficit is predicted to widen to 5.6% of GDP next year in the middle of softer oil costs, while the recent five-year lease freeze in Riyadh intends to reduce inflationary pressures, though it might constrain future real estate supply.
Strong domestic fundamentalsThe UAE is also placed for another strong year of performance, with GDP forecast to increase 5.6% in 2026 as non-oil sectors continue to broaden. Tourism, trade and monetary services stay essential development motorists, supported by population development and sustained 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 pick up again in the 2nd half of 2026, complementing continuous investment in facilities, technology and international trade partnerships. Hanadi Khalife, the Head of Middle East, ICAEW, said: "This quarter's outlook strengthens how far the GCC has been available in structure varied, durable and internationally competitive economies.
Scott 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 getting rate, supported by robust demand and rising investment, even as financial pressures increase.""The UAE continues to take advantage of solid domestic fundamentals, a sharp uplift in government spending and sustained diversity efforts.
Driving Continuous Enhancement Through Gulf Shared ServicesWhat differentiates 2026 from preceding years is not just the acceleration of technological modification, though that acceleration is genuine, but rather a fundamental shift in how enterprises conceive of their GCCs' purpose. The is expected to grow to 4 hundred thirteen billion dollars by 2040, but this growth masks a more extensive change.
Instead, they ask whether these centers drive innovation, own profit-and-loss obligation, and add to competitive distinction. In 2026, the most effective GCCs will act like internal start-ups, nimble, cross-functional, insight-driven, and deeply lined up with international company outcomes. This shift from execution to ownership represents maybe the single most substantial tactical recalibration in the GCC design's advancement.
Today, we're convening more than 3000 meetings in between financiers and 119 Gulf-listed business with a combined worth of $2.4 trillion at the HSBC GCC Exchanges Conference 2026, in London. We're bringing together investors, companies, exchanges, and policymakers to discuss what is changing in the region, and what comes next, consisting of the growth and ongoing development of the Gulf's capital markets, and the area's growing function in international networks of capital and trade.
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