The Gulf Cooperation Council (GCC) region saw 25% growth in its labour market from 2020 to 2024. The number of workers rose from 27.9 million to 34.9 million, driven by development plans. Economic diversification away from oil contributed significantly to this growth. As a result, the Gulf economy is outperforming the global average. The IMF projects a 4.1% growth rate for GCC countries in 2026, higher than the global forecast.
Labour Market Growth: The Numbers Tell the Story
At the 11th meeting of the Committee of Labour Ministers in Kuwait on September 4, 2025. GCC Secretary-General Jasem Albudaiwi highlighted the region’s impressive labour market expansion. The growth has been fueled by policies aimed at reducing unemployment, fostering private sector growth, and empowering the region’s youth. Here are the key trends:
- Expanding Workforce: Over the last four years, the GCC’s workforce has grown by 25%, thanks to the region’s commitment to diversifying its economy and involving more young people in the workforce.
- Lower Unemployment: Unemployment rates in GCC countries have been steadily dropping, with Saudi Arabia’s rate for nationals falling below 10% in 2023, down from 11.8% in 2020.
- More Women in the Workforce: Female participation in the labour market has risen to 40.2% in Q2 2024, up from 36.4% in 2019. This increase is a result of reforms such as Saudi Arabia’s loosening of gender segregation laws, allowing more women to pursue career opportunities.
- Youth Power: The energy and creativity of the young population are major drivers of growth in the GCC. The region’s youth participation rates have surpassed global averages, and their involvement in the labour market is vital for the future.
Non-Oil Sectors: The Engines of Growth
While oil has traditionally been the backbone of the Gulf economies, the real growth story today is in the non-oil sectors. Here’s how diversification is paying off:
- Booming Non-Oil Economies: Saudi Arabia and the UAE have led the charge, with non-oil GDP growth of 4.5% and 5.9%, respectively, in the first half of 2023. Key sectors like construction, tourism, retail, and transportation are driving this growth.
- Visionary Strategies: National plans such as Saudi Arabia’s Vision 2030 and Oman’s Vision 2040 are focused on reducing oil dependency and fostering sustainable growth. Bahrain’s non-oil GDP grew by 4% in 2024, largely thanks to investments in finance, tourism, and infrastructure.
- Private Sector Growth: Efforts to boost the private sector are also paying off. In Saudi Arabia, for example, the Nitaqat program is pushing for more local hiring, particularly in sectors like healthcare and retail.
- Migrant Labour: The GCC continues to depend on migrant workers, particularly in industries like construction and hospitality. The UAE and Qatar, in particular, have large expatriate populations, with migrants making up as much as 88% of the workforce.
Challenges Ahead
Despite the impressive growth, there are a few challenges that the GCC faces as it continues to diversify and grow:
- Youth Unemployment: Despite the high levels of education among youth in the GCC, many still prefer public sector jobs, leading to higher unemployment rates among young people compared to global averages.
- Gender Gaps: While the increase in female participation is encouraging, the GCC still lags behind the global average. Female labour force participation in the GCC was 25% in 2020, compared to the global average of 48.6%.
- Migrant Labour Dependency: The region’s reliance on foreign workers, especially from South Asia, raises social and economic questions. Some studies have shown a negative correlation between the size of the migrant population and GDP growth in certain cases.
- Sustainability of Growth: Although the GCC is diversifying, competition between countries in sectors like tourism and finance could pose challenges, especially as countries continue to rely on oil revenues for funding diversification.
Looking to the Future
The GCC’s labour market growth signals a positive outlook for the region. With a projected 4.1% GDP growth in 2026—surpassing the global average of 3.2%—the GCC is well-positioned to remain a leader in innovation and investment. Here’s what the future holds:
- Policy Focus: Continued investment in education, digital skills, and support for SMEs will be key to sustaining this growth. Bahrain’s push for fintech innovation and Oman’s focus on renewable energy are good examples of the region’s forward-thinking approach.
- Foreign Investment: The GCC’s strong economic growth and diversification are attracting more foreign investment. Over $100 billion has been invested in Africa over the past decade, strengthening trade ties and boosting the region’s global economic presence.
- Social Change: Rising female participation and youth engagement are transforming Gulf societies. As the demographic landscape continues to shift, policies that harness these changes will be critical for long-term success.
Conclusion
The GCC’s labour market grew by 24.8% from 2020 to 2024, driven by strong economic policies and diversification. The region is expected to continue outperforming the global economy with a projected 4.1% GDP growth. Challenges like youth unemployment and migrant labour remain, but the GCC’s future looks bright and dynamic. With a focus on innovation, investment, and social transformation, the Gulf is becoming a global economic powerhouse.
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