Five GCC economic themes to watch in 2026

As the GCC enters 2026, economic policy is being shaped by tighter external conditions, accelerating technological change and a more fragmented global trading system. The countries of the Gulf Cooperation Council (GCC) are increasingly focused on broadening trade relationships, strengthening supply chain resilience, accelerating AI deployment, workforce adaptation, and strengthening fiscal management to support productivity growth and long-term competitiveness.

Jing Teow, Partner, Economic Policy and Strategy, PwC Middle East, said:

“Having already mobilised capital and policy at scale, GCC governments are now focused on delivery. In 2026, the priority is strengthening economic resilience through more secure trade and investment relationships, effective AI deployment, managed workforce transitions and disciplined fiscal policy in a more challenging and fragmented global environment.”

Building broader and more diverse trade bridges

GCC economies are accelerating trade diversification to secure access to growth markets and raw materials as global trade becomes more fragmented. 

Trade negotiations have advanced with China, the European Union, Japan, New Zealand and Mercosur, while talks with the United Kingdom have moved into final drafting and could conclude in 2026. Deeper engagement with Malaysia, Vietnam and the Association of Southeast Asian Nations (ASEAN), alongside progress on the India–Middle East–Europe Economic Corridor (IMEC), is reinforcing the GCC’s role in east–west and south–south trade. Bilateral agreements are expanding in parallel, led by the United Arab Emirates’ Comprehensive Economic Partnership Agreement (CEPA) programme covering more than two dozen partners and delivering double digit trade growth with markets including India, Türkiye and Indonesia. Trade policy is increasingly coordinated with investment-linked diplomacy, supporting deeper and more resilient trade relationships and strengthening the GCC’s position as a key node in emerging trade flows.

Securing critical supply chains

GCC economies are intensifying efforts to secure access to critical minerals as global demand rises and supply chains remain highly concentrated, particularly in rare earth processing and refining. Saudi Arabia is positioning mining as a major economic pillar by 2035, led by Maaden’s expansion across phosphate, aluminium, copper and emerging critical minerals. Alongside upstream partnerships in Africa and Asia, GCC economies are also taking early steps towards domestic processing and logistics capabilities. Together, these moves are positioning the GCC as a strategic connector between African mineral supply and global industrial demand, as well as supporting industrial development and reducing exposure to concentrated global refining capacity over time.

Turning AI ambition into action

In 2026, GCC economies are moving rapidly from AI ambition to large-scale deployment as investments in computing infrastructure ease earlier constraints on access to advanced compute, GPUs and sovereign cloud capacity. Major new computing capacity is coming online across the United Arab Emirates (UAE) and Saudi Arabia, positioning both among the world’s leading countries for planned and active graphic processing unit (GPU) clusters and easing previous constraints on access to advanced compute and sovereign cloud capacity.

As access to advanced compute improves and regulatory expectations become clearer, 2026 will mark a shift from pilot projects towards operational AI deployment across sectors such as finance, energy, logistics and transport, with a growing focus on realising productivity gains, not just experimentation.

Managing workforce transitions in an AI-enabled economy

Despite sustained employment growth, productivity performance across the GCC has weakened over the past decade, reflecting slower technology diffusion, process rigidity and skills mismatches in fast-growing sectors.

As AI adoption accelerates, labour market policy across the GCC is increasingly focused on managing workforce transitions, not just job creation. Governments and employers are expanding modular training and micro-credentials in areas such as data, cybersecurity and AI-enabled operations, supported by public-private partnerships.

Workplace-based learning, apprenticeship-style pathways and targeted incentives for mid-career transitions are expected to play a larger role, alongside more sophisticated labour market platforms that use real-time data to align training supply with employer demand. The objective is to enable workers to move into higher-value roles that combine domain expertise with digital tools, supporting more durable productivity gains over time.

Strengthening fiscal resilience in a lower oil price environment

Lower hydrocarbon revenues are reinforcing the need for expenditure discipline, asset monetisation and private capital mobilisation. 

Going forward, privatisation and public-private partnerships (PPPs) in transport, utilities and non-strategic energy assets, as well as selective borrowing are expected to play a larger role in fiscal management. With major new taxes unlikely, stronger corporate tax and value-added tax compliance, targeted subsidy reforms and prioritised capital spending are expected to support long-term economic diversification while maintaining fiscal sustainability.

Looking ahead

Taken together, these five themes reflect a GCC economy focused on strengthening resilience in a more challenging global environment. In 2026, policy efforts will centre on reinforcing trade and investment relationships, securing critical supply chains, managing workforce transitions linked to AI adoption, and maintaining fiscal stability under lower oil revenues. How effectively these measures are implemented will determine the region’s ability to sustain productivity growth, support diversification and absorb external shocks over the medium term.