Non-oil sectors drive momentum as UAE eyes higher hydrocarbon output and deeper diversification in the years ahead.
Non-Oil Sector Fuels UAE’s 2024 Economic Expansion
The UAE’s economy expanded by 3.9% in 2024, fueled by strong gains in non-oil sectors, according to the Central Bank of the UAE (CBUAE). Although this figure was slightly below the earlier estimate of 4%, it highlights the country’s steady progress in economic diversification.
In its 2024 annual report, the CBUAE noted that the non-oil economy grew by 4.6%. Meanwhile, the hydrocarbon sector reversed its 2023 contraction of 3.1%, recording 1.6% growth last year.
The central bank expects GDP growth to reach 4.7% in 2025 and 5.7% in 2026, as both oil and non-oil sectors continue to improve.
Trade and CEPAs Boost Diversification Efforts
Non-oil foreign trade in the UAE hit a record AED3 trillion ($816.9 billion) in 2024, up 14.6% year-on-year. This surge came on the back of multiple Comprehensive Economic Partnership Agreements (CEPAs) signed with nations including Colombia and Australia.
Sheikh Mohammed bin Rashid, Vice President and Ruler of Dubai, revealed that CEPAs added AED135 billion to non-oil trade—a 42% increase from the previous year. These agreements aim to raise exports by 33% and add over AED153 billion to the UAE economy by 2031.
The report also highlighted benefits for the energy sector, which will likely gain from the planned easing of production cuts in Q2 2025. At the same time, government efforts to attract foreign investment are expected to drive further non-oil sector growth.
Oil Sector Recovery and Stable Inflation Outlook
Hydrocarbon GDP is forecast to grow 3.6% in 2025 and 8.5% in 2026, supported by rising output and relaxed production limits. The central bank believes this recovery, alongside strong non-oil activity, will strengthen the UAE’s overall growth.
Inflation remained moderate at 1.7% in 2024 and is projected to rise slightly to 2% this year. According to the CBUAE, the country’s stable price environment reflects prudent monetary policy and healthy economic fundamentals.
Banking Sector Sees Record Asset Growth
The UAE’s banking sector also saw remarkable progress in 2024. Total assets climbed to AED4.56 trillion ($1.24 trillion), marking a 12% year-on-year increase. This growth reflected the sector’s strong fundamentals, including robust capital levels, profitability, and liquidity.
“Our 2024 initiatives helped increase efficiency and competitiveness across the financial sector,” said Khaled Mohamed Balama, Governor of the CBUAE. “We are building a more resilient and sustainable system.”
These advances reinforce the UAE’s position as a leading financial hub, ready to capitalize on future economic and global market shifts.
