The United Arab Emirates is entering a phase of accelerated economic growth, with projections showing GDP expanding at 4.0% in 2025, followed by 4.5–4.9% in 2026 and 2027. This upswing reflects a maturing non-oil economy and is underpinned by strategic reforms, public investment, and a robust global investment environment.
Growth Drivers: Beyond Oil
Non-hydrocarbon sectors are the chief contributors, including tourism, construction, transport, manufacturing, and financial services. These industries now account for approximately 75% of the nation’s GDP.
Public investment remains strong, with major infrastructure, real estate, and tourism initiatives fueling demand. Government-led reforms continue to support private-sector growth and innovation.
Foreign capital inflows remain healthy. Reforms like 100% foreign ownership, simplified visa options, and new trade agreements have elevated the UAE to become the world’s second-largest recipient of greenfield FDI, drawing over USD 30–31 billion in 2023.
Institutions & Forecasts
The International Monetary Fund forecasts GDP growth of 4.0% in 2025, accelerating to 4.5% in 2026, with inflation expected to remain contained around 2.0% and fiscal surplus around 4% of GDP.
The World Bank recently raised its forecast, now projecting 4.6% growth in 2025, rising to 4.9% in both 2026 and 2027 — a significant upgrade thanks to expanding non-oil output and a gradual easing of OPEC+ production restrictions.
Spotlight on Abu Dhabi & Dubai
Abu Dhabi is expected to lead, with real GDP expanding at 4.2% in 2025, rising to 5.8% in 2026, supported by rising non-oil output and large sovereign wealth investments.
Dubai’s growth projections are slightly more modest — about 3.3% in 2025, nudging up to 3.5% in 2026—but remain firmly rooted in tourism, trade, logistics, and financial services.
