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To reverse a decade of damaging total factor productivity, local labour market policy is shifting from simple task development to managing active labor force shifts. Federal governments and companies are scaling short, modular training programs and micro-credentials in data analytics and digital operations to gear up workers for emerging roles. Workplace-based learning and apprenticeship-style pathways are becoming more typical as companies incorporate AI tools into day-to-day workflows.
With oil rates forecasted to typical $55-60 per barrel in 2026, local federal governments are intensifying their concentrate on expenditure discipline and private capital mobilisation. Fiscal policy is rotating toward the monetisation of state-owned possessions in logistics, energies, and desalination to redirect funds toward higher-impact investments. While borrowing via sukuk and sustainability-linked bonds is expected to increase to fund tactical deficits, the focus stays on enhancing non-oil profits frameworks.
PwC Middle East economic policy and technique partner Jing Teow stated: "Having already mobilised capital and policy at scale, GCC governments are now focused on delivery. In 2026, the concern is enhancing financial strength through more safe trade and financial investment relationships, efficient AI implementation, managed workforce transitions and disciplined fiscal policy in a more difficult and fragmented global environment.".
Saudi Arabia and UAE are poised to lead the Gulf area's economic expansion in 2026, supported by strong private-sector performance, resistant domestic need and renewed financial investment momentum, according to the most recent ICAEW Economic Insight Q4 2025 report, produced by Oxford Economics. The GCC is expected to surpass most global areas peers next year, with local 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 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 once again in the 2nd half of 2026, supporting the region's medium-term outlook, it specified. Saudi Arabia will remain a significant factor to GCC momentum, with GDP projection to grow 4.3% in 2026.
Development will be supported by commercial growth and policy reforms, including alleviated foreign ownership guidelines that aim to promote further investment. The fiscal deficit is projected to broaden to 5.6% of GDP next year amid softer oil costs, while the recent five-year lease freeze in Riyadh aims to reduce inflationary pressures, though it may 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. Tourist, trade and monetary services remain essential development drivers, 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 get once again in the second half of 2026, complementing continuous financial investment in facilities, innovation and worldwide trade collaborations. Hanadi Khalife, the Head of Middle East, ICAEW, stated: "This quarter's outlook strengthens how far the GCC has actually been available in building varied, durable and internationally competitive economies.
Scott Livermore, ICAEW Economic Consultant, and Chief Financial Expert and Managing Director, Oxford Economics Middle East, said: "Saudi Arabia and the UAE are getting in 2026 with strong foundations. Saudi non-oil activity is gaining speed, supported by robust demand and rising investment, even as fiscal pressures increase.""The UAE continues to gain from strong domestic principles, a sharp uplift in government spending and sustained diversification efforts.
The Advancement of Managed Services in the Gulf RegionWhat distinguishes 2026 from preceding years is not simply the acceleration of technological change, though that acceleration is genuine, but rather a fundamental shift in how business envisage their GCCs' function. The is expected to grow to four hundred thirteen billion dollars by 2040, but this development masks a more profound improvement.
Rather, they ask whether these centers drive development, own profit-and-loss obligation, and add to competitive distinction. In 2026, the most successful GCCs will act like internal startups, nimble, cross-functional, insight-driven, and deeply lined up with worldwide business results. This shift from execution to ownership represents possibly the single most significant strategic recalibration in the GCC model's development.
This week, we're convening more than 3000 conferences between financiers and 119 Gulf-listed business with a combined value of $2.4 trillion at the HSBC GCC Exchanges Conference 2026, in London. We're uniting financiers, business, exchanges, and policymakers to discuss what is changing in the region, and what comes next, consisting of the growth and ongoing advancement of the Gulf's capital markets, and the area's growing role in global networks of capital and trade.
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