GCC Labour Market Surges 25% in Four Years, Outpacing Global Economic Growth
The Gulf Cooperation Council (GCC) region, comprising Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates, has seen its labour market grow by an impressive 24.8% from 2020 to 2024, with the number of workers rising from 27.9 million to 34.9 million. This growth, driven by ambitious development visions and non-oil sector expansion, has positioned the Gulf economy to outperform the global average, with the International Monetary Fund (IMF) projecting a 4.1% growth rate for GCC economies in 2026, surpassing global forecasts. Below is a detailed analysis of this trend, its drivers, and implications, based on recent reports and data as of September 4, 2025.
Labour Market Growth: Key Figures and Trends
At the 11th meeting of the Committee of Labour Ministers in Kuwait City on September 4, 2025, GCC Secretary-General Jasem Albudaiwi highlighted the region’s labour market expansion. The 24.8% growth over four years reflects robust economic policies aimed at reducing unemployment, boosting private sector participation, and developing skills. Key points include:
- Workforce Expansion: The labour force grew from 27.9 million in 2020 to 34.9 million in 2024, a 25% increase, driven by economic diversification and youth engagement.
- Unemployment Reduction: Policies across GCC states have lowered unemployment rates, with Saudi Arabia’s rate for nationals dropping below 10% by 2023, down from 11.8% in 2020.
- Women’s Participation: Female workforce participation surged to 40.2% in Q2 2024, up from 36.4% in 2019, reflecting reforms like Saudi Arabia’s relaxed gender segregation laws and increased job opportunities for women.
- Youth and Innovation: Albudaiwi noted the “vitality and youthful energy” of Gulf societies as a source of creativity, with participation rates surpassing global averages, necessitating adaptive labour policies.
Economic Drivers: Non-Oil Sectors and Diversification
The GCC’s economic growth, projected at 4.1% in 2026 by the IMF, is fueled by non-oil sectors, which have become the region’s primary development engine. Key drivers include:
- Non-Oil Sector Growth: Saudi Arabia and the UAE led with 4.5% and 5.9% non-oil GDP growth in H1 2023, respectively, driven by investments in construction, tourism, retail, and transportation.
- Ambitious Visions: National strategies like Saudi Arabia’s Vision 2030 and Oman’s Vision 2040 prioritize diversification, reducing oil dependency. Bahrain’s non-oil GDP, for instance, grew 4% in 2024, supported by finance, tourism, and infrastructure projects.
- Private Sector Expansion: Increased private sector roles, such as Saudi Arabia’s Nitaqat program mandating local hiring, have boosted national employment in sectors like healthcare and retail.
- Foreign Labour Dynamics: The GCC relies heavily on migrant workers, who make up 50% of the population on average, with the UAE and Qatar hosting up to 88% foreign-born residents. This supports labour-intensive sectors like construction and hospitality.
Challenges and Considerations
Despite the growth, challenges persist:
- Youth Unemployment: High education levels among GCC youth contrast with a preference for public sector jobs, leading to unemployment rates higher than the global average in some states.
- Gender Disparities: While female participation has risen, the GCC’s 25% female labour force participation rate in 2020 was half the global average of 48.6%, though reforms are closing this gap.
- Migrant Labour Dependency: The heavy reliance on foreign workers, particularly from South Asia, raises social and economic questions, with studies suggesting a negative correlation between migrant population size and GDP growth in some contexts.
- Sustainability of Diversification: Intra-regional competition in sectors like tourism and finance, coupled with oil revenue dependency for diversification funding, poses risks to long-term growth.
Implications and Future Outlook
The GCC’s labour market growth signals a robust economic trajectory, outpacing the global average and positioning the region as a hub for innovation and investment. The 4.1% projected growth for 2026, compared to a global forecast of 3.2% (IMF, October 2023), underscores this strength. Key implications include:
- Policy Development: Continued investment in education, digital skills, and SME support, as seen in Bahrain’s fintech push and Oman’s renewable energy initiatives, will sustain labour market growth.
- Global Investment Appeal: The GCC’s economic resilience attracts foreign direct investment, with over $100 billion invested in Africa alone over the past decade, enhancing trade ties.
- Social Transformation: Rising female participation and youth engagement are reshaping Gulf societies, requiring policies to harness this demographic dividend.
However, the region must address youth unemployment and migrant labour dynamics to ensure inclusive growth. The World Bank’s 2024 Gulf Economic Update emphasizes education quality as critical for sustaining economic breakthroughs, a focus for GCC policymakers.
Conclusion
The GCC’s labour market has grown 24.8% from 2020 to 2024, driven by non-oil sector expansion and visionary policies, outpacing global economic growth. With a projected 4.1% GDP growth in 2026, the region is leveraging its youthful population and increasing female participation to cement its global standing. Challenges like youth unemployment and migrant dependency remain, but the GCC’s trajectory suggests a dynamic future. For deeper insights, check reports from the World Bank or follow discussions on X for real-time perspectives.