The ICAEW Economic Insight Q4 2025 report from Oxford Economics outlined how the UAE will lead GCC economic expansion in 2026, with Saudi Arabia progressing alongside it as both countries reinforce regional growth through rising non-oil activity and steady domestic demand.
What changed in GCC performance
The GCC aims for 4.4% GDP growth in 2026. Non-energy sectors rise by 4.1% as labour markets stay strong. Investment in technology and AI infrastructure also increases. Consumer spending grows by about 3.5% through 2026–2027. Oil revenue may dip early in the year, but producers plan a lift in output later.
Impact on regional economies
The UAE targets 5.6% GDP growth in 2026. Tourism, trade and financial services push this trend. Dubai reports 4.4% growth in early 2025, showing broad non-oil strength. The 2026 federal budget increases support for goals under We the UAE 2031. Oil output should also rise in the second half of the year.
Saudi Arabia expects 4.3% GDP growth in 2026. Non-oil activity gains pace. The October PMI climbs above 60. Non-oil exports also rise 17.1% this year. Industrial expansion and eased foreign ownership rules encourage investment. Softer oil prices widen the 2026 fiscal deficit to 5.6%. Riyadh’s rent freeze aims to slow inflation but may reduce future supply.
Supporting statements
ICAEW’s Hanadi Khalife said the GCC now builds stronger and more competitive economies through long-term planning and wider non-oil activity. Oxford Economics Middle East Chief Economist Scott Livermore said the UAE and Saudi Arabia enter 2026 with solid momentum, even with slower early-year oil activity under the OPEC+ pause.
Where the 2026 trajectory stands
The report shows steady non-oil expansion, easier financial conditions and higher investment. These trends place the GCC on a firm path into 2026. The UAE and Saudi Arabia continue their development plans and maintain regional economic stability.
