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To reverse a decade of damaging overall element efficiency, local labour market policy is shifting from basic job creation to handling active labor force shifts. Governments and employers are scaling short, modular training programs and micro-credentials in data analytics and digital operations to gear up workers for emerging functions. Workplace-based learning and apprenticeship-style paths are becoming more common as firms integrate AI tools into daily workflows.
With oil costs forecasted to typical $55-60 per barrel in 2026, local governments are intensifying their concentrate on expense discipline and private capital mobilisation. Fiscal policy is pivoting towards the monetisation of state-owned assets in logistics, utilities, and desalination to redirect funds toward higher-impact financial investments. While borrowing via sukuk and sustainability-linked bonds is expected to increase to money strategic deficits, the focus remains on strengthening non-oil income frameworks.
PwC Middle East financial policy and method partner Jing Teow stated: "Having currently mobilised capital and policy at scale, GCC governments are now concentrated on shipment. In 2026, the priority is strengthening financial resilience through more protected trade and financial investment relationships, efficient AI release, handled workforce transitions and disciplined financial policy in a more difficult and fragmented worldwide environment.".
Saudi Arabia and UAE are poised to lead the Gulf area's financial expansion in 2026, supported by strong private-sector efficiency, durable domestic demand and restored investment momentum, according to the current ICAEW Economic Insight Q4 2025 report, produced by Oxford Economics. The GCC is anticipated to outperform most global regions peers next year, with local GDP projection to grow by 4.4%. Throughout the GCC, non-energy activity is predicted to expand by 4.1% in 2026, driven by strong labour markets, improving credit conditions and increasing investment in innovation and AI-related infrastructure.
Oil earnings will be under pressure in the very first half of 2026, production is anticipated to rise again in the 2nd half of 2026, supporting the region's medium-term outlook, it mentioned. Saudi Arabia will stay a significant factor to GCC momentum, with GDP forecast to grow 4.3% in 2026.
Growth will be supported by industrial growth and policy reforms, including relieved foreign ownership rules that aim to stimulate further financial investment. The fiscal deficit is projected to expand to 5.6% of GDP next year amidst softer oil costs, while the current five-year rent freeze in Riyadh aims to alleviate inflationary pressures, though it may constrain future housing supply.
Strong domestic fundamentalsThe UAE is also placed for another strong year of efficiency, with GDP projection to rise 5.6% in 2026 as non-oil sectors continue to broaden. Tourist, trade and financial services stay essential development drivers, supported by population development and continual domestic need. Dubai's economy grew 4.4% in the very first half of 2025, reflecting broad-based non-oil strength.
Oil production is anticipated to get again in the 2nd half of 2026, complementing continuous investment in facilities, innovation and global trade collaborations. Hanadi Khalife, the Head of Middle East, ICAEW, said: "This quarter's outlook enhances how far the GCC has come in building diverse, durable and internationally competitive economies.
How UAE Firms Are Battling the Great Talent MigrationScott Livermore, ICAEW Economic Consultant, 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 gaining pace, supported by robust need and rising investment, even as financial pressures increase.""The UAE continues to benefit from strong domestic basics, a sharp uplift in federal government costs and continual diversification efforts.
How UAE Firms Are Battling the Great Talent MigrationWhat differentiates 2026 from preceding years is not just the velocity of technological modification, though that acceleration is genuine, however rather a fundamental shift in how enterprises conceive of their GCCs' function. The is anticipated to grow to 4 hundred thirteen billion dollars by 2040, however this growth masks a more profound transformation.
Instead, they ask whether these centers drive innovation, own profit-and-loss responsibility, and add to competitive distinction. In 2026, the most effective GCCs will act like internal startups, agile, cross-functional, insight-driven, and deeply lined up with international company outcomes. This shift from execution to ownership represents perhaps the single most substantial strategic recalibration in the GCC design's advancement.
Today, we're convening more than 3000 conferences 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 bringing together investors, companies, exchanges, and policymakers to discuss what is altering in the area, and what follows, including the expansion and continuous development of the Gulf's capital markets, and the area's growing function in international networks of capital and trade.
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