The UAE’s economy is expected to grow by 4.8% in 2025 and the growth rate will rise to about 5% in 2026, according to the International Monetary Fund (IMF).
The UAE will experience the highest growth rate among Gulf Cooperation Council (GCC) countries, following the strong performance of the UAE economy this year, said Dr Jihad Azour, Director of the Middle East and Central Asia Department at the IMF, during a press conference organised by the Dubai International Financial Centre (DIFC) in cooperation with the Fund, under the title “IMF Regional Economic Outlook: Middle East and North Africa Report.”
He explained that the UAE’s high growth rate is mainly driven by service sectors such as tourism, financial services, and real estate. He also noted that growth in Abu Dhabi in particular is further supported by improved oil production following the relaxation of the OPEC+ agreement, in addition to the strong performance of the services and real estate sectors.
The Emirate of Abu Dhabi is expected to post an economic growth of around 6%, and the Emirate of Dubai to record growth of 3.4% during the current year, according to the IMF forecast.
MENA RESILIENCE
Economic activity in the Middle East and North Africa (MENA) has shown remarkable resilience, despite persistent global uncertainty and heightened geopolitical tensions, the report said.
According to the report, the region has largely avoided direct fallout from higher US tariffs and global trade restrictions. And while recent tensions have raised concern, their impact has been limited and short-lived.
"Growth prospects have strengthened since our last assessment. We now project regional GDP growth at 3.2 percent this year, up from 2.1 percent in 2024 — a 0.6 percentage-point upward revision since May. Looking ahead, we expect growth to accelerate to 3.7 percent next year, 0.3 percentage points higher than our previous forecast, and to remain broadly steady over the medium term," Dr Azour, said.
"These upgrades reflect a range of factors. Among MENA oil exporters, stronger growth stems primarily from higher-than expected production following the unwinding of OPEC+ cuts. Growth in these economies is projected to reach 3 percent in 2025 and 3.4 percent in 2026, compared with 2.5 percent last year."
For oil importers, Dr Azour said, momentum is also improving. Growth is projected to rise to 3.5 percent in 2025 and 4.1 percent in 2026, supported by lower oil prices, strong remittances, robust tourism inflows, and better agricultural conditions. Continued progress on macroeconomic stabilisation and structural reforms is helping these economies build resilience and strengthen their outlook.
Looking ahead, he expected GDP growth in MENA to strengthen further this year and next, driven by resilient demand, higher oil output, and ongoing reforms. Over the medium term, growth should gradually accelerate as reforms and stabilisation policies take hold.
The challenge now is for policymakers to translate that resilience into sustained, inclusive growth over the long term, he added.
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