UAE's Economic Expansion Projected at 4.6% in 2025, Primarily Propelled by Growth in Non-Petroleum Sectors
The UAE's economic expansion is set to be impressive, with the World Bank predicting a whopping 4.6% growth in 2025, rising to 4.9% in the following years. This growth spurt is primarily due to the non-oil sectors that has been the engine of growth for the UAE.
According to the recent Gulf Economic Update, the will continue to be the growth engine, with a projected 4.9% expansion in 2025. This robust performance is a testament to the UAE's relentless push for economic diversification and reduction of its hydrocarbon dependency.
The wider GCC region is poised for a comeback, with growth forecasted at 3.2% in 2025, booming to 4.5% in 2026. The report points to a regional economic upswing, moving from 0.3% in 2023 to 1.7% in 2024, powered by strong private consumption, increased investment, and structural reforms.
Despite navigating global headwinds, including trade uncertainties and the specter of a broader economic slowdown, the GCC countries must step up their pace for accelerated reform to boost regional trade and economic diversification, emphasizes the World Bank.
Saafa El Tayeb El-Kogali, World Bank Director for the GCC, acknowledged the bloc’s resilience and emphasized the importance of reforms in strengthening the regional economy.
The report delves into the influence of fiscal policy on stability, revealing that public spending has acted as a cushion for GCC economies during downturns. A hike in fiscal spending by one unit can potentially lift non-oil output by around 0.45 units, highlighting the crucial role of smart budgeting amid fluctuating oil prices.
Key sectors in the UAE responsible for its economic growth include, but are not limited to, transport and storage, construction, finance, hospitality and real estate, trade and manufacturing, and technology and innovation. Together, these sectors accounted for more than 75% of the UAE’s GDP in 2024 and grew around 5%. With budget forecasts predicting a growth rate of around 4.7-5.1% in 2025 and beyond.
News Source: Emirates News Agency
Sources: [1][4][5]
- The UAE's continued economic growth in 2025 is expected to be driven by key sectors such as transport, finance, real estate, trade, manufacturing, technology, and innovation, with a combined contribution of more than 75% to the GDP and an anticipated growth of around 5%.
- To further boost economic diversification and reduce hydrocarbon dependency, the UAE is expected to increase investment in innovation, as highlighted by the World Bank Director for the GCC, Saafa El Tayeb El-Kogali.
- The GCC region's economic growth rate, projected to reach 4.5% in 2026, is attributed to strong private consumption, increased investment, and structural reforms, making it an attractive destination for businesses and investors.
