The World Bank has raised its GDP growth projection for the UAE to 4.6% in 2025, a 0.6 percentage point increase from its January estimate, largely driven by the nation’s burgeoning non-oil sector. The forecast for 2026 has also been revised upwards by 0.8 percentage points to 4.9%, with an anticipated expansion in oil GDP as OPEC+ production quotas are gradually phased out.
According to the World Bank’s latest ‘Global Economic Prospects’ report, the UAE’s non-oil sector is expected to expand by 4.9% in 2025, buoyed by growth in tourism, construction, transportation, and financial services. This momentum is predicted to continue, with overall GDP growth forecasted at 4.9% for both 2026 and 2027. The bank noted that a gradual increase in oil production from May 2025 to September 2026 will bolster oil GDP growth, even amidst downward pressure on global oil prices.
This positive outlook follows a strong performance in 2024, where the UAE’s real GDP grew by 3.7% year-on-year in the first nine months, supported by a 4.5% expansion in the non-oil sector. The report attributes the sustained growth to ongoing business-friendly reforms, infrastructure investments, and governance improvements that have enhanced economic diversification and competitiveness. However, it also cautioned that key sectors like logistics could face challenges from global trade uncertainties and disruptions.
In a broader context, the World Bank has lowered its global growth forecast for 2025 to 2.3%, citing higher tariffs and increased uncertainty as significant obstacles for most economies, including the US, China, and Europe. Despite this global slowdown, the GCC region is expected to see robust growth, with forecasts of 3.2% for 2025, 4.5% for 2026, and 4.8% for 2027.
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