GCC economies are expected to stay resilient in 2026, driven by strong domestic demand and a broadly steady global economy, according to an analysis.

In its latest report, Oxford Economics highlighted that the real gross domestic product of the GCC region is expected to expand by 4.4 per cent in 2026, up from the projected 4pc this year.

The projection is broadly aligned with the World Bank’s December outlook, which expects growth in the GCC region to hit 3.2pc in 2025 and 4.5pc in 2026.

Earlier this month, the International Monetary Fund said that GCC economic output is forecast to accelerate to an average of 3.3pc in 2025, up from 1.7pc in 2024.

“Growth in the GCC will likely beat our expectations this year following two years of disappointment. US trade policy under President Donald Trump has had no notable impact on regional growth, and non-energy sectors have sustained their robust momentum,” said Oxford Economics.

It added: “Meanwhile, oil production has gradually increased, providing a boost to the region’s economies. We expect GCC growth will rise to 4.4pc in 2026, from 4pc this year.”

In November, the GCC Statistical Centre said that economic growth in the region is set to accelerate to 4.3pc by 2027, driven by expanding non-oil sectors.

The GCC Statistical Centre revealed that economies in the region expanded by 3pc in the first half of this year, with combined GDP reaching $588.1 billion, up from $570.9bn in the same period last year.

Non-oil activities accounted for 73.2pc of total GDP, up from 70.6pc at the end of 2024, highlighting the region’s continued progress towards diversification.

According to Oxford Economics, GCC consumers will be standout performers in 2026 and are expected to outperform their international peers.

Oxford Economics said that low inflation has helped protect growth in real disposable income, which has also been supported by strong demand and very low unemployment rates.

“We do not envision any let-up, as governments continue to push for greater foreign direct investment in their push to diversify their economies away from oil and gas,” the report added.

In October, the IMF said that inflation in the GCC region is expected to average 1.7pc in 2025 and 2pc in 2026 – underscoring the bloc’s resilience to global price pressures.

In December, the IMF further said that headline inflation is expected to stay below 2pc in Bahrain, Oman and Qatar, close to 2pc in the Saudi Arabia and the UAE, and slightly above 2pc in Kuwait in 2025–2026.

According to Oxford Economics, credit growth is expected to remain elevated in the GCC region during 2026, as access to financial services is expected to grow and lending is projected to be supported by further cuts in interest rates.

“Owing to their currency pegs to the US dollar, GCC central banks are expected to follow the US Federal Reserve by easing monetary policy further, which in turn will lower debt servicing costs and boost disposable income and demand,” said the report.

The report further highlighted that the Opec+ pause on oil output will likely be extended to the second quarter of next year, marginally impacting growth momentum among countries in the region.

“The announcement from Opec+ of a pause in the recent re-expansion of oil production came as no surprise, as excess inventories surpassed two million barrels per day,” said Oxford Economics.

It added: “Our forecast has the price of Brent crude oil falling below $60 per barrel in early 2026, which should prompt Opec+ to extend its pause to the second quarter. This is likely to stall the contribution from oil extraction to GDP.”

The report projected that GCC countries are expected to resume raising oil supplies again in the second half of next year, and a full unwinding of remaining caps on production is likely to happen in mid-2027.

Qatar’s economy is likely to be the best-performing in the region, as the country is expected to substantially increase its gas production and exports in 2026.

Oxford Economics further said that GCC countries are increasingly recognising the importance of diversifying their economies, with these nations considering AI-related sectors as strategically important opportunities for the region.

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