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According to ACCA’s global economic outlook released in late January, world output is projected to expand at just over 3 percent in 2026, matching the prior year’s pace but remaining below pre-pandemic averages amid geopolitical strains, elevated public debt and high financial market valuations. The report, detailed by Arabian Business on February 6, highlighted how Gulf economies enter the period with relative strength after sustained fiscal consolidation, the build-up of sovereign wealth reserves and steady capital inflows. Oil-exporting economies retain greater fiscal flexibility compared with advanced economies facing rising debt-servicing costs and limited policy space, the assessment stated.
Geopolitical risks ranging from the Ukraine conflict to Middle East tensions and global trade uncertainties have long been embedded in GCC asset prices, reducing the scope for sudden market repricing when international conditions tighten, the ACCA document noted. A regional economist at an international bank told Arabian Business that GCC assets tend to be priced with a geopolitical discount. That positioning makes them comparatively less vulnerable when global markets awaken to hazards previously overlooked.
Advanced economies face particular pressure from elevated government debt that could push bond yields higher, tighten financial conditions and spark corrections, according to the report. In contrast, most Gulf governments depend primarily on energy revenues rather than borrowing to fund expenditure, which insulates their budgets from abrupt shifts in global bond markets. Such income has continued to support infrastructure development, economic diversification and investment in strategic sectors that sustain momentum even as the international environment softens.
Artificial intelligence has become a key driver of global growth and trade, with AI-linked goods fuelling much of the expansion in 2025 and bolstering equity markets as well as business investment especially in the United States, the ACCA outlook reported. Gulf states are actively positioning themselves to capture portions of this trend through abundant low-cost energy, available capital and modern infrastructure to host data centres and digital services. The report cautioned that over-reliance on AI carries risks if productivity gains disappoint or technology stocks undergo a sharp correction.
Global trade displayed more resilience than anticipated last year despite higher tariffs and policy uncertainty, as supply chains rerouted rather than contracted in a pattern the report described as slowbalisation where trade moves sideways as a share of output. This development has bolstered the Gulf’s established role as a logistics and re-export hub spanning Asia, Europe and Africa. Ports, free zones and air cargo networks across the region have gained from companies adjusting routes to accommodate new tariff regimes, Arabian Business reported.
The ACCA assessment warned that the Gulf remains exposed to global shocks such as a steep drop in oil prices, intensified trade disruptions or disorderly financial market corrections that could weigh on regional activity and sentiment. Nevertheless, the balance of risks for GCC economies stands more favourable than for many peers heading into 2026 given their fiscal strength, strategic location and risks already priced into local markets. A World Bank assessment from early 2026 placed global growth at 3.1 percent for the year, aligning closely with the ACCA projection while pointing to continued volatility.
