Economic momentum across the Gulf Cooperation Council (GCC) is expected to pick up again in 2026, even as oil prices remain softer and global uncertainty lingers. After a period marked by production limits and uneven external demand, the region appears to be entering a more stable phase. The key question now is not whether growth will return, but what will drive it.
Oxford Economics forecasts real GDP growth across the GCC at 4.4% in 2026, up from an estimated 4% in 2025. That outlook broadly matches projections from both the World Bank and the International Monetary Fund (IMF), suggesting a shared view that the worst of the recent slowdown is behind the region. Expansion had dipped below 2% in 2024, largely due to OPEC+ production curbs and fragile global conditions, but the balance of growth drivers has since shifted.
Growth in the GCC will likely beat our expectations this year … US trade policy … has had no notable impact on regional growth, and non-energy sectors have sustained their robust momentum.
Oxford Economics
How non-oil demand take the lead
Non-oil sectors are now doing most of the heavy lifting. Data from the GCC Statistical Center (GCC-Stat) shows that non-oil activity accounts for more than 73% of total GDP, underlining how far diversification efforts have progressed.
With inflation expected to stay close to 2% across most Gulf states, rising real incomes and strong employment levels should support consumer spending. Can households become the main engine of growth in a region once defined by oil revenues? Current indicators propose they already are.
Financial conditions are also expected to remain supportive. Because GCC currencies are pegged to the US dollar, anticipated US Federal Reserve rate cuts are likely to be mirrored locally. Lower borrowing costs should keep credit growth healthy for both businesses and consumers, reinforcing domestic demand.
Short-term oil limits, longer-term change
Oil production, however, will still shape the near-term outlook. Output is expected to remain constrained in early 2026 due to high inventories and prices dipping below $60 a barrel, before recovering later in the year as demand improves.
Fiscal approaches will differ, with Saudi Arabia tightening capital spending while the UAE and Qatar maintain expansionary paths. Qatar, in particular, is forecast to outperform peers as gas production ramps up. Beyond the next year, investment in artificial intelligence and rapid workforce adoption point to longer-term, technology-led growth.
