Two mega trends that are set to shape the GCC in 2026

The trajectory of the Gulf is being shaped by forces that go far beyond macroeconomics. Getty Images

As we enter 2026, the Gulf stands at one of the most interesting moments in its modern economic story. For years, the GCC economies have been building the foundations of diversification, investing in infrastructure, reshaping regulatory systems and preparing their societies for a world in which natural resources are no longer the sole engine of prosperity. The coming year will show how those long-term bets begin to move from vision to impact.

On a macroeconomic level, forecasts point to steady momentum. The Economist Intelligence Unit expects GCC growth to reach around 3 per cent in 2025 and rise to 4.1 per cent in 2026. That acceleration will not come from the traditional hydrocarbons cycle alone, but from large infrastructure projects, expanding private sectors, and a healthy pipeline of economic reforms across the region. Tourism, manufacturing and logistics will continue to strengthen their position as viable non-oil pillars. Oil prices remain supportive, but the story of 2026 will be about the maturing of the non-oil economy.

Yet the trajectory of the Gulf is being shaped by forces that go far beyond macroeconomics. In 2026, two strategic shifts will define the region: the rise of the AI state, and the expanding geoeconomic footprint of GCC investment — particularly toward Asia.

The first, and perhaps most transformative, is the emergence of the AI-enabled state. In 2024 and 2025, the GCC made what was described by one US news network as a “trillion-dollar AI gamble”. That wager will start to become far more visible in 2026. Across the region — especially in the UAE and Saudi Arabia — governments are building vast AI capabilities: supercomputers, sovereign models, data centres, research hubs and specialised regulatory frameworks.

The year 2026 could start to see the shift from lab experiments to live deployment at national scale. Imagine ministries using AI to draft law amendments in minutes, not months. Economic departments running AI models that predict which sectors will face talent shortages 18 months out — and adjusting visa policies accordingly.

Visible productivity surge in companies' quarterly earnings — banks processing loan applications 80 per cent faster, logistics firms cutting delivery costs by 30 per cent through AI route optimisation, construction companies using AI to reduce project delays by half, and so on. Labor markets also begin shifting: demand spikes for "AI trainers", who teach systems Gulf-specific context, while routine roles shrink.

By year-end 2026, the region won't just compete in AI; it will be the world's live demonstration of AI governance at scale, an evolution studied from Singapore to Brussels.

In 2026, we should expect GCC-Asia ties to deepen

The second major trend is the slow but steady rewiring of global trade routes. The Gulf’s long-standing orientation toward the West is now balanced by a deeper, more deliberate pivot to Asia. China, India, South Korea, Japan and South-East Asia are no longer only energy customers (albeit major ones here, as Asia now absorbs over 70 per cent of total GCC oil and gas exports); they have become partners in technology, logistics, manufacturing and investment.

In 2024, and according to Asia House, Gulf-China trade surpassed Gulf-West trade for the first time, reaching $257 billion compared to $256 billion with western nations, and according to the World Economic Forum, the Asean-GCC partnership alone is expected to generate $50 billion in new trade flows by 2027.

In 2026, we should expect GCC-Asia ties to deepen through joint research centres, advanced manufacturing partnerships, and new trade corridors connected to ports, free zones and rail systems. The shift is subtle but strategic: Asian markets are now central to the Gulf’s long-term economic resilience.

This pivot also reflects the shifting gravity of the global economy itself. Asia is projected to account for more than half of global GDP growth over the next decade. By anchoring itself to Asia’s rise, the GCC is future-proofing its trade relationships and securing access to the world’s fastest-growing consumer and technology markets.

These two mega GCC trends are unfolding against a backdrop of a global economy that remains fragile. A slowdown in major economies, uncertainty in global markets, and potential US tariff policies all pose risks. Yet the GCC enters 2026 with strong buffers: fiscal space, large reserves, healthy banking systems and the political will to maintain reform momentum.

Interest rate cuts expected in 2026 will support liquidity and investment appetite. Even the anticipated dip in FDI in 2025 is projected to reverse sharply in 2026, partly due to regulatory improvements and the continued build-out of infrastructure.

However, not all of the region’s states may benefit equally. Investors are increasingly selective, and there is a risk that the gap widens between the region’s largest reform-driven economies and the smaller states.

Overall, 2026 will not be a year of dramatic disruption, but a year of visible consequences. The investments of the past five years — in technology, economic diversification, regulatory modernisation, and global partnerships — will begin to yield measurable results. If 2024 and 2025 were years of building capacity, 2026 will be the year those capacities are put to work. Not for preparing for the future, but for shaping it.