The economies of the Gulf Cooperation Council (GCC) are forecast to accelerate growth in 2026, with real gross domestic product (GDP) expected to expand by 4.4 percent, according to a recent analysis by Oxford Economics. This projection marks an improvement from an estimated 4 percent growth in 2025, signalling renewed momentum in the region’s economic performance.
Key drivers of the stronger outlook include resilient domestic demand, sustained expansion in non-oil sectors and a supportive macroeconomic environment underpinned by declining inflation and robust labour markets. Non-oil activities now contribute the majority of economic output, reflecting the GCC’s ongoing structural shift away from hydrocarbon dependency.
Low inflation rates, projected to hover around 2 percent in 2026, have helped protect real disposable incomes, while very low unemployment and tightening credit conditions have bolstered consumer spending. Oxford Economics also expects credit growth to stay elevated as central banks in the region, with their currencies pegged to the U.S. dollar, follow potential interest rate cuts by the U.S. Federal Reserve.
Governments across the GCC continue to prioritise foreign direct investment and economic diversification, further supporting medium-term resilience. While oil production dynamics — including an anticipated extension of OPEC+ output pauses into early 2026 — could modestly temper growth contributions from hydrocarbons, gradual increases in output later in the year are expected to offset these effects.
The region’s growth prospects broadly align with other international forecasts, with institutions such as the World Bank and International Monetary Fund also projecting robust expansion driven by non-energy sectors and stable global conditions.
Overall, the 2026 forecast reflects a transition toward diversified growth engines across the GCC, bolstered by strong consumer dynamics and ongoing reforms that support long-term economic resilience.
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