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To reverse a decade of compromising overall factor productivity, local labour market policy is moving from simple task creation to handling active workforce shifts. Governments and employers are scaling short, modular training programs and micro-credentials in data analytics and digital operations to equip workers for emerging functions. Workplace-based knowing and apprenticeship-style pathways are ending up being more common as companies incorporate AI tools into everyday workflows.
With oil prices forecasted to average $55-60 per barrel in 2026, local governments are magnifying their focus on expenditure discipline and private capital mobilisation. Financial policy is rotating toward the monetisation of state-owned assets in logistics, energies, and desalination to reroute funds toward higher-impact financial investments. While borrowing by means of sukuk and sustainability-linked bonds is anticipated to increase to fund strategic deficits, the focus remains on strengthening non-oil revenue structures.
PwC Middle East economic policy and strategy partner Jing Teow said: "Having already mobilised capital and policy at scale, GCC governments are now concentrated on delivery. In 2026, the top priority is enhancing financial durability through more safe and secure trade and financial investment relationships, reliable AI implementation, handled labor force shifts and disciplined fiscal policy in a more challenging and fragmented international environment.".
Saudi Arabia and UAE are poised to lead the Gulf area's financial expansion in 2026, supported by strong private-sector performance, resistant domestic demand and restored financial investment momentum, according to the most recent ICAEW Economic Insight Q4 2025 report, produced by Oxford Economics. The GCC is expected to outshine most international regions peers next year, with regional GDP forecast to grow by 4.4%. Throughout the GCC, non-energy activity is forecasted to broaden by 4.1% in 2026, driven by strong labour markets, improving credit conditions and rising financial investment in technology and AI-related facilities.
Although oil profits will be under pressure in the very first half of 2026, production is expected to rise once again in the second half of 2026, supporting the region'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 expansion and policy reforms, consisting of eased foreign ownership guidelines that intend to promote more investment. The fiscal deficit is projected to expand to 5.6% of GDP next year amid softer oil costs, while the current five-year lease 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 increase 5.6% in 2026 as non-oil sectors continue to expand. Tourism, trade and financial services remain essential development chauffeurs, supported by population growth and sustained domestic need. Dubai's economy grew 4.4% in the first half of 2025, showing broad-based non-oil strength.
Oil production is anticipated to select up once again in the 2nd half of 2026, complementing ongoing investment in facilities, innovation and worldwide trade partnerships. Hanadi Khalife, the Head of Middle East, ICAEW, said: "This quarter's outlook reinforces how far the GCC has been available in building diverse, durable and worldwide competitive economies.
Scott Livermore, ICAEW Economic Consultant, and Chief Financial Expert and Handling Director, Oxford Economics Middle East, stated: "Saudi Arabia and the UAE are going into 2026 with strong foundations. 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 solid domestic principles, a sharp uplift in government costs and sustained diversity efforts.
Increasing Business Agility Through Gulf Shared Service CentersWhat differentiates 2026 from preceding years is not simply the velocity of technological change, though that velocity is genuine, but rather an essential shift in how business conceive of their GCCs' function. The is anticipated to grow to 4 hundred thirteen billion dollars by 2040, but this development masks a more profound improvement.
Instead, they ask whether these centers drive innovation, own profit-and-loss obligation, and add to competitive differentiation. In 2026, the most successful GCCs will act like internal start-ups, agile, cross-functional, insight-driven, and deeply lined up with international service results. This shift from execution to ownership represents possibly the single most significant tactical recalibration in the GCC model's development.
This week, we're convening more than 3000 conferences between investors and 119 Gulf-listed business 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 area, and what follows, consisting of the growth and continuous advancement of the Gulf's capital markets, and the region's growing function in worldwide networks of capital and trade.
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