The International Monetary Fund (IMF) has issued an even more optimistic forecast for the UAE’s economy, upgrading its real GDP growth projection for 2025 to 4.8%, a significant jump from earlier estimates. The forecast, which also projects growth of 5% in 2026, positions the UAE as a leading economy in the region, driven primarily by strong performance in its non-hydrocarbon sectors and a faster-than-anticipated unwinding of OPEC+ production cuts.
The strength of the non-oil sector is the central narrative, now accounting for a record high of over 75% of the UAE’s real GDP. Key drivers include:
- Manufacturing: Led growth with an estimated 7.7% increase in Q1 2025.
- Finance and Insurance: Followed closely with 7.0% growth.
- Construction and Real Estate: Supported by major urban development projects, with the real estate sector expanding by 6.6% in Q1 2025.
- Tourism and Logistics: Continue to see robust activity, reinforced by the UAE’s role as a global hub.
The improved outlook also factors in a rebound in hydrocarbon production as the OPEC+ voluntary output cuts ease. This recovery complements the government’s Vision 2030 diversification plan, which is accelerating economic transformation through investor-friendly reforms, new visa regimes, and massive public and private investment in digitalization, AI, and infrastructure. This strategic diversification provides resilience and allows the UAE to significantly outpace projected global growth rates.
