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To reverse a decade of compromising total element performance, regional labour market policy is moving from simple task production to handling active labor force transitions. Governments and companies are scaling short, modular training programs and micro-credentials in information analytics and digital operations to equip employees for emerging roles. Workplace-based learning and apprenticeship-style pathways are becoming more common as firms incorporate AI tools into everyday workflows.
With oil prices forecasted to average $55-60 per barrel in 2026, regional governments are intensifying their focus on expense discipline and private capital mobilisation. Fiscal policy is pivoting towards the monetisation of state-owned properties in logistics, utilities, and desalination to reroute funds toward higher-impact investments. While borrowing by means of sukuk and sustainability-linked bonds is anticipated to increase to fund strategic deficits, the focus remains on reinforcing non-oil profits frameworks.
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 priority is strengthening economic strength through more safe and secure trade and investment relationships, efficient AI implementation, handled workforce shifts and disciplined fiscal policy in a more tough and fragmented global environment.".
Saudi Arabia and UAE are poised to lead the Gulf region's financial expansion in 2026, supported by strong private-sector performance, durable domestic demand and restored investment momentum, according to the most recent ICAEW Economic Insight Q4 2025 report, produced by Oxford Economics. The GCC is anticipated to surpass most international regions peers next year, with local GDP projection to grow by 4.4%. Across the GCC, non-energy activity is predicted to expand by 4.1% in 2026, driven by strong labour markets, enhancing credit conditions and rising financial investment in technology and AI-related infrastructure.
Oil revenues will be under pressure in the very first half of 2026, production is anticipated to increase once again in the second half of 2026, supporting the region's medium-term outlook, it specified. Saudi Arabia will stay a significant factor to GCC momentum, with GDP projection to grow 4.3% in 2026.
Development will be supported by industrial growth and policy reforms, including reduced foreign ownership rules that aim to promote further investment. The fiscal deficit is predicted to widen to 5.6% of GDP next year in the middle of softer oil prices, while the recent five-year lease freeze in Riyadh intends to reduce inflationary pressures, though it may constrain future real estate supply.
Strong domestic fundamentalsThe UAE is also placed for another strong year of efficiency, with GDP forecast to rise 5.6% in 2026 as non-oil sectors continue to expand. Tourism, trade and monetary services stay key development drivers, supported by population development and sustained domestic need. Dubai's economy grew 4.4% in the very first half of 2025, reflecting broad-based non-oil strength.
Oil production is expected to select up once again in the 2nd half of 2026, complementing continuous financial investment in infrastructure, technology and worldwide trade partnerships. Hanadi Khalife, the Head of Middle East, ICAEW, stated: "This quarter's outlook reinforces how far the GCC has come in structure diverse, resilient and internationally competitive economies.
How to Utilize Regional Incentives in Saudi Service HubsScott Livermore, ICAEW Economic Advisor, and Chief Economic Expert and Handling Director, Oxford Economics Middle East, said: "Saudi Arabia and the UAE are entering 2026 with strong foundations. Saudi non-oil activity is acquiring rate, supported by robust demand and increasing investment, even as fiscal pressures increase.""The UAE continues to benefit from strong domestic basics, a sharp uplift in federal government spending and continual diversification efforts.
How to Utilize Regional Incentives in Saudi Service HubsWhat distinguishes 2026 from preceding years is not simply the acceleration of technological change, though that velocity is real, but rather an essential shift in how business develop of their GCCs' purpose. The is expected to grow to four 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 responsibility, and contribute to competitive distinction. In 2026, the most effective GCCs will act like internal startups, nimble, cross-functional, insight-driven, and deeply aligned with international service outcomes. This shift from execution to ownership represents possibly the single most substantial strategic recalibration in the GCC model's advancement.
This week, we're assembling more than 3000 meetings in between investors and 119 Gulf-listed companies with a combined worth 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 region, and what follows, consisting of the expansion and continuous advancement of the Gulf's capital markets, and the region's growing role in worldwide networks of capital and trade.
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