Jobs, remittances to shrink in Middle East as firms delay hiring due to war, says report
The job market in the Middle East and North Africa (MENA) is projected to weaken significantly in 2026 as firms delay hiring due to the regional war, and this could significantly impact remittances from GCC countries, according to a new report.
The World Economic Forum’s Chief Economists’ Outlook report revealed that 74 per cent of surveyed chief economists expect weak or very weak employment growth over the next 12 months as firms postpone hiring.
“Trade, tourism and investment are interrupted with no immediate relief in sight,” the report said.
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The Middle East war involving the US, Israel and Iran is casting a long shadow over the region’s labour market. The International Labour Organization (ILO) has also warned that the instability threatens millions of jobs, particularly in conflict-affected economies where disrupted supply chains, reduced foreign investment, and damaged infrastructure are eroding employment opportunities.
The Chief Economists’ Outlook is based on consultations and surveys with leading chief economists from the public and private sectors. The survey was conducted from April 6 to 17, 2026.
“Only months ago, the Chief Economists community was cautiously optimistic. The conflict in the Middle East changed that, and the economic scarring from the situation thus far is already expected to last into the months ahead,” said Saadia Zahidi, Managing Director, World Economic Forum.
“The longer the disruption lasts, the heavier the long-term cost for those who can least afford it,” she added.
The World Bank has echoed these concerns, noting that the crisis compounds pre-existing challenges such as low productivity growth and limited private sector dynamism, making job creation increasingly difficult across the broader region.
However, the wealthier Gulf Cooperation Council (GCC) economies are demonstrating resilience and even robust hiring growth. Saudi Arabia continues to drive strong demand for talent across infrastructure, tourism, and energy sectors, fuelled by its Vision 2030 agenda, while the UAE remains the regional leader in recruiting for AI, data, finance, and cybersecurity roles. That said, geopolitical ripple effects – including shifts in capital flows, expatriate remittances, and tourism – mean that even Gulf labour markets are not entirely insulated.
The World Economic Forum survey found that job cuts in GCC countries due to the regional war will impact remittances from the region.
It added that disruptions to local labour markets and to remittance flows could further increase pressure on recipient countries, as migrant workers account for a large share of private sector employment.
It is estimated that foreign workers account for 76 per cent to 95 per cent of the private sector workforce in Gulf countries.
The WEF report found that the outlook for the Middle East and North Africa has deteriorated sharply, with 88 per cent of chief economists now expecting weak or very weak growth over the year ahead – a dramatic reversal from January, when respondents still saw the region as one of the brighter spots in the global growth landscape.
Chief economists said oil exporters may retain some ability to cushion the shock, while importers and conflict-affected economies face harsher adjustments.
The WEF survey found that 55 per cent of chief economists expect high or very high inflation in the region. A longer disruption around the Strait of Hormuz would likely send prices skyrocketing as supplies of imported goods dry up.
