The Gulf Cooperation Council (GCC) economies are expected to stage a strong recovery in 2027, with regional GDP forecast to grow by 8.1%, according to a new report released by ICAEW in partnership with Oxford Economics.
The report projects that the GCC economy will contract by 2.4% in 2026 due to the impact of regional tensions on energy exports, tourism, and investment activity. However, the outlook improves significantly for 2027 as trade routes stabilize, energy production recovers, and business confidence strengthens.
The oil sector is expected to face the largest short-term impact, with output forecast to decline by 14.5% in 2026. Nevertheless, analysts anticipate a strong rebound of 23.5% in 2027 as production returns to normal levels.
Among GCC countries, Saudi Arabia and the United Arab Emirates are expected to remain the most resilient economies. Both countries have benefited from diversified economic activity and alternative export infrastructure that has helped reduce the impact of regional disruptions.
Despite challenges facing the energy and tourism sectors, governments across the Gulf are expected to continue investing in strategic industries such as technology, healthcare, and financial services. Low public debt levels and stable financing conditions are also expected to support long-term growth.
The report further highlights that inflation across the GCC is likely to remain under control, averaging 2.6% in 2026 before easing to 2.1% in 2027.
While 2026 is expected to be a challenging year for the region, the outlook for 2027 points to a robust recovery driven by stronger energy exports, renewed travel demand, and continued economic diversification initiatives.
Source: Gulfbusiness