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To reverse a decade of deteriorating overall factor performance, regional labour market policy is shifting from basic job production to handling active workforce 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 knowing and apprenticeship-style pathways are becoming more typical as firms incorporate AI tools into everyday workflows.
With oil prices forecasted to average $55-60 per barrel in 2026, local federal governments are magnifying their focus on expenditure discipline and personal capital mobilisation. Financial policy is pivoting towards the monetisation of state-owned assets in logistics, utilities, and desalination to redirect funds towards higher-impact investments. While borrowing through sukuk and sustainability-linked bonds is expected to increase to money tactical deficits, the focus stays on enhancing non-oil earnings structures.
PwC Middle East financial policy and method partner Jing Teow said: "Having already mobilised capital and policy at scale, GCC federal governments are now focused on delivery. In 2026, the top priority is reinforcing financial strength through more safe and secure trade and investment relationships, reliable AI implementation, managed labor force shifts and disciplined financial policy in a more challenging 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, resistant domestic need and restored financial investment momentum, according to the newest ICAEW Economic Insight Q4 2025 report, produced by Oxford Economics. The GCC is expected to outperform most international areas peers next year, with regional GDP forecast to grow by 4.4%. Across the GCC, non-energy activity is forecasted to expand by 4.1% in 2026, driven by strong labour markets, enhancing credit conditions and rising investment in technology and AI-related infrastructure.
Although oil incomes will be under pressure in the very first half of 2026, production is expected to increase again in the 2nd half of 2026, supporting the area's medium-term outlook, it specified. Saudi Arabia will stay a significant contributor to GCC momentum, with GDP projection to grow 4.3% in 2026.
Growth will be supported by industrial expansion and policy reforms, consisting of eased foreign ownership guidelines that aim to stimulate more investment. The financial deficit is forecasted to broaden to 5.6% of GDP next year in the middle of softer oil rates, while the current five-year lease freeze in Riyadh aims to relieve inflationary pressures, though it might constrain future real estate supply.
Strong domestic fundamentalsThe UAE is likewise 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 monetary services remain key development chauffeurs, supported by population development and continual domestic need. Dubai's economy grew 4.4% in the first half of 2025, showing broad-based non-oil strength.
Oil production is expected to get once again in the second half of 2026, complementing continuous financial investment in facilities, technology and worldwide trade collaborations. Hanadi Khalife, the Head of Middle East, ICAEW, said: "This quarter's outlook enhances how far the GCC has been available in building varied, durable and internationally competitive economies.
Scott Livermore, ICAEW Economic Advisor, 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 getting pace, supported by robust need and increasing investment, even as financial pressures increase.""The UAE continues to take advantage of solid domestic fundamentals, a sharp uplift in federal government costs and continual diversification efforts.
Driving Operational Excellence in the GCCWhat differentiates 2026 from preceding years is not merely the velocity of technological change, though that acceleration is genuine, however rather a basic shift in how enterprises envisage their GCCs' function. The is expected to grow to four hundred thirteen billion dollars by 2040, but this development masks a more profound transformation.
Rather, they ask whether these centers drive development, own profit-and-loss duty, and add to competitive distinction. In 2026, the most successful GCCs will behave like internal start-ups, nimble, cross-functional, insight-driven, and deeply aligned with international company results. This shift from execution to ownership represents possibly the single most significant strategic recalibration in the GCC model's advancement.
This week, we're assembling more than 3000 conferences 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, companies, exchanges, and policymakers to discuss what is altering in the area, and what comes next, including the expansion 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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