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To reverse a decade of compromising total factor performance, local labour market policy is moving from easy job production to managing active labor force shifts. 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 knowing and apprenticeship-style pathways are ending up being more typical as companies integrate AI tools into everyday workflows.
With oil prices anticipated to average $55-60 per barrel in 2026, regional federal governments are intensifying their focus on expenditure discipline and personal capital mobilisation. Fiscal policy is rotating toward the monetisation of state-owned properties in logistics, energies, and desalination to reroute funds toward higher-impact investments. While loaning via sukuk and sustainability-linked bonds is expected to increase to money tactical deficits, the focus stays on strengthening non-oil revenue structures.
PwC Middle East financial policy and method partner Jing Teow stated: "Having already mobilised capital and policy at scale, GCC federal governments are now focused on delivery. In 2026, the priority is reinforcing economic durability through more protected trade and investment relationships, effective AI deployment, handled labor force transitions 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 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 international areas peers next year, with regional 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, improving credit conditions and increasing investment in technology and AI-related facilities.
Although oil earnings will be under pressure in the first half of 2026, production is anticipated to increase again in the 2nd half of 2026, supporting the region's medium-term outlook, it mentioned. Saudi Arabia will stay 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, consisting of alleviated foreign ownership guidelines that intend to stimulate further financial investment. The fiscal deficit is forecasted to expand to 5.6% of GDP next year in the middle of softer oil costs, while the current five-year lease freeze in Riyadh aims to reduce inflationary pressures, though it might constrain future housing supply.
Strong domestic fundamentalsThe UAE is also positioned for another strong year of performance, with GDP forecast to increase 5.6% in 2026 as non-oil sectors continue to broaden. Tourist, trade and financial services remain crucial growth motorists, supported by population growth and sustained domestic demand. Dubai's economy grew 4.4% in the first half of 2025, reflecting broad-based non-oil strength.
Oil production is expected to choose up once again in the 2nd half of 2026, matching ongoing investment in infrastructure, technology and worldwide trade collaborations. Hanadi Khalife, the Head of Middle East, ICAEW, stated: "This quarter's outlook enhances how far the GCC has can be found in building diverse, resilient and globally competitive economies.
Will the GCC Sustain Industrial Growth through 2026?Scott Livermore, ICAEW Economic Consultant, and Chief Economic Expert and Handling Director, Oxford Economics Middle East, said: "Saudi Arabia and the UAE are going into 2026 with strong structures. Saudi non-oil activity is acquiring pace, supported by robust need and rising investment, even as financial pressures increase.""The UAE continues to gain from solid domestic principles, a sharp uplift in government costs and sustained diversification efforts.
Will the GCC Sustain Industrial Growth through 2026?What distinguishes 2026 from preceding years is not simply the velocity of technological modification, though that velocity is real, however rather a basic shift in how enterprises envisage their GCCs' purpose. The is expected to grow to 4 hundred thirteen billion dollars by 2040, but this growth masks a more extensive improvement.
Rather, they ask whether these centers drive development, own profit-and-loss obligation, and contribute to competitive differentiation. In 2026, the most successful GCCs will behave like internal start-ups, nimble, cross-functional, insight-driven, and deeply lined up with global service results. This shift from execution to ownership represents possibly the single most significant tactical recalibration in the GCC design's development.
This week, we're convening more than 3000 conferences in between investors 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 financiers, business, exchanges, and policymakers to discuss what is changing in the area, and what follows, including the growth and ongoing development of the Gulf's capital markets, and the region's growing role in international networks of capital and trade.
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