The Institute of Chartered Accountants in England and Wales (ICAEW) forecasts that Saudi Arabia and the UAE will lead the Gulf’s economic expansion in 2026, driven by robust private-sector activity, resilient domestic demand, and advancing diversification efforts.
According to the ICAEW Economic Insight Q4 2025 report, produced by Oxford Economics, the GCC’s GDP is expected to grow by 4.4 per cent in 2026, outpacing most global regions.
Non-energy activity across the region is set to expand by 4.1 per cent, supported by improving credit conditions, labour market strength, and rising investment in technology and AI-related infrastructure. Consumer spending is forecast to increase by an average of 3.5 per ent over 2026–2027.
Saudi Arabia’s non-oil economy is forecast to grow by 5 per cent, supported by industrial expansion, foreign investment reforms, and sustained Vision 2030 spending. Despite fiscal pressures and a projected deficit of 5.6 per cent of GDP, the Kingdom’s non-oil exports have risen 17.1 per cent year-to-date, with business confidence at decade highs.
The UAE economy is projected to grow 5.6 per cent in 2026, underpinned by population growth, strong tourism, trade, and financial services. Dubai’s economy expanded 4.4 per cent in the first half of 2025, reflecting broad-based non-oil gains.
Higher federal spending in 2026, aligned with the We the UAE 2031 strategy, will reinforce long-term growth, alongside an expected recovery in oil production in the year’s second half.
Hanadi Khalife, Head of Middle East, ICAEW, said: “This quarter’s outlook reinforces how far the GCC has come in building diverse, resilient and globally competitive economies. With Saudi Arabia and the UAE driving momentum through non-oil expansion, investment in technology and long-term development planning, the region is well positioned to navigate global uncertainties and continue shaping its role as an economic leader.”
Scott Livermore, ICAEW Economic Advisor and Chief Economist at Oxford Economics Middle East, added: “Saudi Arabia and the UAE are entering 2026 with strong foundations. While the OPEC+ pause will weigh on oil growth early in the year, easing financial conditions and expanding non-oil economies should underpin another year of solid performance.”
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