UAE Poised for Strong Economic Growth in 2025, Says IMF — Abu Dhabi to Lead with 4.2%, Dubai to Follow with 3.3%

Abu Dhabi/Dubai, May 2025 – The International Monetary Fund (IMF) has released a bullish economic forecast for the United Arab Emirates, signaling continued resilience and expansion in the nation’s two largest emirates. According to the IMF’s latest projections, Abu Dhabi’s economy is expected to grow by 4.2% in 2025, with a notable uptick to 5.8% in 2026, positioning the capital as a regional growth leader. Meanwhile, Dubai’s economy is set to grow by 3.3% in 2025, rising to 3.5% the following year, reflecting steady momentum in non-oil sectors.

The forecasts come at a time of considerable global uncertainty, where economic risks in the form of rising geopolitical tensions, supply chain disruptions, and volatile oil prices have forced the IMF to revise down its growth outlook for the broader Middle East and North Africa (MENA) region. The region’s overall growth for 2025 has been trimmed to 2.6%, a sharp decline from the 4% projected in October 2024.


Non-Oil Sectors Drive UAE’s Growth Engine

The UAE’s ability to sustain growth amid regional and global headwinds is largely attributed to the government’s proactive economic diversification strategies. Abu Dhabi, with its focus on knowledge-based industries, sustainable development, and large-scale infrastructure investments, continues to attract capital and talent from across the globe. Dubai’s growth, on the other hand, is being fueled by vibrant activity in the real estate, logistics, financial services, and tourism sectors.

"Abu Dhabi’s ambitious Vision 2030 framework and the Emirate’s fiscal prudence have ensured a strong post-pandemic recovery,” the IMF stated in its report. “Dubai’s international connectivity and entrepreneurial landscape make it an economic bellwether for the region.”

Policy Reforms and Investor Confidence

Another critical factor in the UAE’s positive outlook is the government’s commitment to structural reforms, particularly in areas such as foreign ownership laws, residency programs, and corporate taxation clarity. These policy changes have significantly enhanced investor confidence and continue to attract foreign direct investment into both emirates.

“Despite global economic tightening, the UAE remains a standout performer, offering a blend of stability, opportunity, and long-term strategic planning,” said an IMF regional analyst.

Looking Ahead: A Regional Outlier

While other economies in the MENA region brace for slower growth due to external pressures and domestic reforms, the UAE stands out as a regional outlier. The IMF forecasts the UAE’s overall GDP to grow by 4% in 2025, reaching 5% in 2026—an affirmation of the country’s resilience and upward trajectory.

As both Abu Dhabi and Dubai continue to implement forward-looking policies and invest in strategic sectors, the UAE is well-positioned not only to weather global turbulence but to thrive in a rapidly evolving economic landscape.


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