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To reverse a decade of deteriorating total factor performance, local labour market policy is moving from basic job development to managing active labor force transitions. Governments and companies are scaling short, modular training programmes and micro-credentials in data analytics and digital operations to gear up workers for emerging roles. Workplace-based learning and apprenticeship-style pathways are ending up being more typical as firms integrate AI tools into daily workflows.
With oil prices anticipated to typical $55-60 per barrel in 2026, local governments are magnifying their concentrate on expenditure discipline and private capital mobilisation. Financial policy is rotating toward the monetisation of state-owned properties in logistics, energies, and desalination to redirect funds toward higher-impact financial investments. While loaning through sukuk and sustainability-linked bonds is expected to increase to fund tactical deficits, the focus remains on enhancing non-oil revenue frameworks.
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 concern is enhancing financial durability through more safe trade and financial investment relationships, reliable AI implementation, handled workforce shifts and disciplined financial policy in a more challenging and fragmented international environment.".
Saudi Arabia and UAE are poised to lead the Gulf region's financial growth in 2026, supported by strong private-sector efficiency, durable domestic need and restored investment momentum, according to the current ICAEW Economic Insight Q4 2025 report, produced by Oxford Economics. The GCC is expected to outshine most international regions peers next year, with local 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, enhancing credit conditions and increasing investment in technology and AI-related facilities.
Oil profits will be under pressure in the very first half of 2026, production is expected to rise again in the second half of 2026, supporting the area's medium-term outlook, it mentioned. Saudi Arabia will stay a significant contributor to GCC momentum, with GDP projection to grow 4.3% in 2026.
Development will be supported by industrial growth and policy reforms, consisting of eased foreign ownership rules that aim to stimulate further investment. The fiscal deficit is forecasted to widen to 5.6% of GDP next year amid softer oil costs, while the current five-year lease freeze in Riyadh aims to ease inflationary pressures, though it might constrain future real estate supply.
Strong domestic fundamentalsThe UAE is also positioned for another strong year of efficiency, with GDP forecast to increase 5.6% in 2026 as non-oil sectors continue to broaden. Tourist, trade and monetary services remain essential development chauffeurs, supported by population development and sustained domestic demand. Dubai's economy grew 4.4% in the very first half of 2025, showing broad-based non-oil strength.
Oil production is expected to select up again in the second half of 2026, complementing ongoing financial 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 actually come in structure varied, resistant and internationally competitive economies.
Scott Livermore, ICAEW Economic Advisor, and Chief Economist and Handling Director, Oxford Economics Middle East, stated: "Saudi Arabia and the UAE are entering 2026 with strong foundations. Saudi non-oil activity is getting rate, supported by robust demand and rising financial investment, even as financial pressures increase.""The UAE continues to take advantage of strong domestic basics, a sharp uplift in government costs and continual diversification efforts.
What distinguishes 2026 from preceding years is not merely the velocity of technological change, though that acceleration is real, but rather a basic shift in how enterprises conceive of their GCCs' purpose. The is expected to grow to four hundred thirteen billion dollars by 2040, however this development masks a more profound change.
Instead, they ask whether these centers drive innovation, own profit-and-loss responsibility, and contribute to competitive differentiation. In 2026, the most effective GCCs will behave like internal start-ups, agile, cross-functional, insight-driven, and deeply lined up with global company outcomes. This shift from execution to ownership represents maybe the single most substantial strategic recalibration in the GCC model's evolution.
Today, we're convening 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 combining investors, companies, exchanges, and policymakers to discuss what is changing in the region, and what comes next, consisting of the expansion and ongoing development of the Gulf's capital markets, and the region's growing function in worldwide networks of capital and trade.
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