The latest Gulf Economic Update projects that the UAE economy will grow by 4.8 percent in 2025. Moreover, the report notes that the country continues to show balanced progress across both oil and non-oil sectors. Real GDP is expected to expand by 4.8 percent next year, and the UAE remains a regional leader in export diversification. Meanwhile, other Gulf economies are also set to advance, as the report forecasts growth of 3.8 percent for Saudi Arabia, 3.5 percent for Bahrain, 3.1 percent for Oman, 2.8 percent for Qatar, and 2.7 percent for Kuwait.
Diversification Trends and Digital Transformation
Over the past decade, the Gulf has pursued economic diversification, and the report explains that progress has been moderate, though promising indicators continue to emerge. Furthermore, it outlines three focus areas: the evolution of diversification indicators, macroeconomic developments, and digital transformation. The Gulf’s digital shift is accelerating rapidly, and all GCC countries now benefit from advanced telecommunications networks, with over 90 percent 5G coverage and affordable high-speed internet. In addition, rising investment in data centres and high-performance computing is strengthening AI readiness across the region. The UAE and Saudi Arabia are positioned as leaders both regionally and internationally, and this momentum is supported by strong innovation ecosystems, project funding, and increased government adoption of generative AI.
Safaa El Tayeb El Kogali said that diversification and digital transformation are no longer a luxury, but a necessity for achieving long-term economic stability and prosperity. She added that the digital leap achieved by GCC countries is remarkable, noting that strong infrastructure, growing computing power, and increasing AI-related skills and competencies enhance the region’s position for leadership and innovation, provided environmental and labour-market challenges are addressed proactively.
Workforce Development and Competitiveness
Women’s participation in STEM fields now exceeds the global average, and this improvement further boosts the region’s digital competitiveness. Additionally, the report recommends supporting small and medium-sized enterprises in adopting AI, since this transition can enhance innovation and improve long-term productivity. It also advises governments to roll out training programmes that upskill the workforce and help close labour-market gaps, allowing countries to maximise the impact of diversification and digital transformation.
