Middle East Conflict to Slow GCC Job Hiring, Squeeze Remittances as Firms Turn Cautious, Says WEF Report

The job market across the Middle East and North Africa (MENA) is expected to weaken sharply in 2026 as companies delay recruitment amid the ongoing regional conflict, a trend that could also reduce remittance flows from Gulf countries, a new report has warned.

According to the World Economic Forum’s Chief Economists’ Outlook report, 74 per cent of surveyed chief economists expect weak or very weak employment growth over the next 12 months as businesses postpone hiring decisions.

“Trade, tourism and investment are being disrupted, with no immediate relief in sight,” the report noted.

The conflict involving the US, Israel and Iran is casting a prolonged shadow over the region’s labour market. The International Labour Organization (ILO) has also cautioned that the instability threatens millions of jobs, especially in conflict-hit economies where disrupted supply chains, declining foreign investment and damaged infrastructure are steadily weakening employment opportunities.

The Chief Economists’ Outlook draws on consultations and surveys conducted with leading economists from both the public and private sectors. The survey was carried out between April 6 and April 17, 2026.

“Only a few months ago, the Chief Economists community remained cautiously optimistic. The Middle East conflict has altered that outlook, and the economic scars caused by the situation are already expected to extend well into the coming months,” said Saadia Zahidi, Managing Director of the World Economic Forum.

“The longer the disruption continues, the greater the long-term burden for those least able to absorb it,” she added.

The World Bank has echoed similar concerns, saying the crisis is worsening existing structural challenges such as low productivity growth and weak private sector momentum, making job creation increasingly difficult across the wider region.

At the same time, the wealthier Gulf Cooperation Council (GCC) economies continue to show resilience and, in some sectors, strong hiring momentum. Saudi Arabia is sustaining demand for talent across infrastructure, tourism and energy sectors under its Vision 2030 strategy, while the UAE remains a leading regional hub for recruitment in artificial intelligence, data, finance and cybersecurity.

However, the report noted that geopolitical aftershocks — including shifts in capital movement, expatriate remittances and tourism activity — mean even Gulf labour markets are not completely shielded from the wider fallout.

The World Economic Forum survey found that any job losses in GCC countries linked to the regional conflict are likely to affect remittance flows from the Gulf.

It added that disruptions in labour markets and remittance channels could place further strain on recipient countries, particularly because migrant workers make up a substantial share of private sector employees across the Gulf.

Foreign workers are estimated to account for between 76 per cent and 95 per cent of the private sector workforce in Gulf nations.

The WEF report said the outlook for the Middle East and North Africa has deteriorated significantly, with 88 per cent of chief economists now expecting weak or very weak economic growth over the next year — a sharp reversal from January, when the region was still viewed as one of the more promising areas in the global economy.

Chief economists noted that oil-exporting countries may still have some capacity to absorb the shock, while import-dependent and conflict-affected economies are likely to face more severe economic adjustments.

The survey also found that 55 per cent of chief economists expect high or very high inflation across the region. Any prolonged disruption around the Strait of Hormuz could push prices sharply higher as supplies of imported goods become constrained.

 
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