The United Arab Emirates (UAE) is solidifying its reputation as one of the world’s most dynamic and resilient economies, with the International Monetary Fund (IMF) projecting the nation will deliver the fastest growth within the Gulf region in the coming year.
According to the latest analysis, the UAE’s strong momentum, underpinned by successful economic diversification and robust investor confidence, has resulted in an upgraded outlook despite a challenging global economic landscape.
Key Growth Projections for the UAE
The IMF forecasts the country’s real GDP is expected to expand by 4.8 per cent in 2025, a notable increase from earlier projections. This strong trajectory is anticipated to accelerate further, reaching 5.0 per cent in 2026.
The growth is highly concentrated across the Emirates:
- Abu Dhabi: The capital’s economy is forecasted to expand by an impressive 6 per cent in 2025. This exceptional performance is attributed to gains in both rising oil output and particularly strong growth in key non-oil sectors like services and real estate.
- Dubai: The emirate, which continues its global role as a premier tourism and financial hub, is expected to see growth of 3.4 per cent, ensuring balanced nationwide economic strength.
Economic Diversification Fuels Non-Oil Sector Resilience
A primary driver of the UAE’s economic leadership within the GCC is the resilience of its non-oil sectors. The country’s commitment to diversification has resulted in key engines of growth emerging from areas such as:
- Tourism & Hospitality: Dubai’s sustained global appeal continues to draw massive international footfall.
- Financial Services: Both Abu Dhabi and Dubai are strengthening their positions as major global financial centres.
- Real Estate: The sector shows robust demand, exemplified by a surge in property transactions in Abu Dhabi, reflecting population growth, infrastructural expansion, and long-term market confidence.
This consistent performance is being sustained by sound policy, stable fiscal management, and ambitious national strategies like “We the UAE 2031.”
Strong Capital Markets and Investor Confidence
The UAE continues to attract significant regional and global capital. Investor confidence is evident in the vibrant equity markets, which have seen a boom in Initial Public Offerings (IPOs) across various sectors, from logistics to energy, often drawing heavy oversubscription.
Analysts view the UAE market, supported by strong fundamentals, solid balance sheets, and government-led investments in technology and energy transition, as a resilient and attractive destination for global investors seeking stability alongside high growth.
Source Acknowledgment: This content is based on reporting by Gulf Business regarding the International Monetary Fund’s (IMF) latest regional economic outlook.
