The World Bank has raised its GDP growth projection for the UAE in 2025 to 4.6%, an increase of 0.6 percentage points from its January estimate. This upgrade highlights the rising influence of non-oil industries, which the Bank identifies as the “key contributor” to growth.
Forecasts for 2026 have also improved, with expected growth now set at 4.9%. Sectors such as tourism, transportation, construction, and financial services are driving this outlook. Notably, the non-oil sector is projected to expand by 4.9% in 2025 alone.
In the first nine months of 2024, the UAE’s real GDP grew 3.7% year-on-year. This was largely due to a 4.5% expansion in the non-oil economy. Structural reforms and targeted investments played a major role in this performance.
Oil Output Recovery Adds to Growth
Although oil prices remain under pressure globally, the UAE’s oil GDP is expected to increase. The World Bank cited a gradual return to oil production between May 2025 and September 2026. As OPEC+ curbs are phased out, production will support overall GDP gains.
By 2027, the UAE’s economy is forecast to maintain a 4.9% growth rate. This consistency signals long-term confidence in both the country’s diversification efforts and external demand for key services and goods.
Reforms Boost Outlook, But Risks Remain
Economic reforms and infrastructure investments continue to enhance the UAE’s global competitiveness. The World Bank pointed to “ongoing business climate reforms, infrastructure investments, and governance enhancements” as key drivers behind the positive revisions.
Despite the optimistic outlook, risks persist. Trade disruptions and geopolitical uncertainties could impact logistics and other critical sectors. Nevertheless, the UAE is positioned to manage these risks effectively, thanks to its diversified base and strategic planning.
At the global level, the World Bank reduced its 2025 growth forecast by 0.4 percentage points to 2.3%. It cited high tariffs and increased uncertainty as major headwinds for most economies. Projections for nearly 70% of countries—including the US, China, and those in Europe—were downgraded, although the Bank ruled out a global recession.
For the wider GCC region, growth is projected at 3.2% in 2025, rising to 4.5% in 2026 and 4.8% in 2027.
