WASHINGTON: The World Bank’s newly released Gulf Economic Update (GEU) – Fall 2025 projects the UAE economy to expand by 4.8% next year, underscoring the country’s continued strong and well-balanced growth across both oil and non-oil industries.
The report—titled “The Gulf’s Digital Transformation: A Powerful Engine for Economic Diversification”—highlights the UAE’s success in broadening its export base and maintaining robust overall economic performance. For 2025, the World Bank expects real GDP growth of 4.8% for the UAE, alongside growth forecasts of 3.8% for Saudi Arabia, 3.5% for Bahrain, 3.1% for Oman, 2.8% for Qatar, and 2.7% for Kuwait.
The publication centres around three themes: the evolution of diversification efforts over the past decade, key macroeconomic trends, and the rising momentum of digital transformation across the Gulf.
According to the report, GCC states have made moderate but increasingly encouraging progress in diversifying their economies, with the most significant advances emerging in recent years. It also emphasises the region’s rapid digital acceleration, including widespread adoption of artificial intelligence.
All GCC countries now benefit from highly advanced telecom infrastructure, with more than 90% 5G coverage and widespread access to affordable, high-speed internet. Heavy investments in data centres and high-performance computing are bolstering AI readiness, positioning the UAE and Saudi Arabia as leading players both regionally and globally.
These developments are strengthened by supportive innovation ecosystems—ranging from financing tools to facilities for emerging technologies—as well as growing government use of generative AI.
Safaa El Tayeb El Kogali, World Bank Division Director for the GCC, said economic diversification and digitalisation have become essential prerequisites for long-term sustainability and prosperity. She noted that the Gulf’s rapid technological gains, strong digital infrastructure, and rising AI capabilities put the region in a strong position to lead—provided environmental and labour-market challenges are addressed.
The report also points out that women’s participation in STEM fields in the Gulf is higher than the global average, adding to the region’s competitive advantage in the digital space.
Among its recommendations, the World Bank urges greater support for SMEs adopting AI-driven tools, and expanded workforce training programmes aimed at reducing skills gaps and maximising the economic impact of diversification and digital transformation.
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