UAE Central Bank raises economic growth forecast for 2025

The UAE Central Bank has raised its 2025 economic growth forecast to 4.9%, up from the earlier estimate of 4.4%, citing strong momentum in non-oil activity. The economy is now expected to expand further by 5.3% in 2026, according to the regulator’s latest Quarterly Economic Review.

Q1 Performance

In the first quarter of 2025, the UAE economy grew 3.9% year-on-year. Non-oil GDP surged 5.3%, supported by solid growth across manufacturing, financial services, construction, and real estate. Overall GDP for the quarter reached Dh455 billion, with non-oil output contributing Dh352 billion—over 77% of total real GDP.

Role of Oil & Opec+

The Central Bank noted that the revised outlook is also underpinned by “anticipated strong momentum in non-hydrocarbon activities” alongside a robust recovery in the hydrocarbon sector, driven by updated Opec+ production plans. Oil-related activities accounted for 22.7% of GDP in Q1 2025.

Private Sector Confidence

Business activity continues to strengthen: the S&P Global UAE Purchasing Managers’ Index climbed to 53.3 in August, up from 52.9 in July, signaling expanding private sector confidence.

Policy & Diversification Drive

The UAE Cabinet has also launched the National Policy for Economic Clusters, targeting an additional Dh30 billion ($8 billion) contribution to GDP annually. These clusters will focus on financial services, tourism, space, communications and data, and food industries, reinforcing the country’s transition towards a knowledge-driven economy.

Market Commentary

The revised Central Bank forecast aligns with market expectations. Emirates NBD projects around 5% GDP growth this year, highlighting strong performance across both oil and non-oil sectors.

✨ Key takeaway: With diversification at the core and non-oil activity driving over three-quarters of GDP, the UAE remains on track for robust growth momentum through 2026.

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