UAE Economy Set for Strong 4% Growth in 2025 Surpassing Last Year Performance

In the latest report from the world bank, it is mentioned that the UAE will see a strong 4% growth in 2025 and 2026 surpassing 2024. But comparing this calculation with the World bank’s June 2024 prediction, it is slightly 0.1 per cent less.

However, the UAE’s 2025 growth forecast is greater than the 3.3% growth forecast from the previous year which was lowered by 0.6% in its most recent Global Economic Prospects report. According to the international organisation, the economy of the United Arab Emirates will continue to develop at the quickest rate in the Gulf area by 2025 surpassing that of Saudi Arabia (3.4%), Bahrain (3.3%), Qatar (2.7%), Oman (2.4%) and Kuwait (1.7%).

The UAE now has the third fastest growing economy in the GCC behind Saudi Arabia (5.4%) and Qatar (5.5%) after the World Bank increased its 2026 growth prediction by 0.1% to 4.1%. On a regional level, it reduced the Gulf Cooperation Council’s (GCC) growth estimate for 2025 by 1.4% to 3.3% but increased it by 1.1% for the following year to 4.6%. Growth in the GCC is predicted to have increased to 1.6% in 2024, mostly due to stable labour markets, a rebound in capital inflows, and strong non-oil activities. It stated that monetary easing in GCC countries is expected to continue in sync with predicted monetary policy easing in the United States and favourable financial conditions, hence supporting activity over the forecast period.

Growth in the Middle East and North Africa (Mena) is predicted to accelerate to 3.4% in 2025 and 4.1% in 2026, owing to the gradual development of oil output. The prognosis for 2025 has been lowered by 0.8 percentage points, primarily due to Opec+ members extending some of the voluntary oil production curbs that were earlier scheduled to be lifted at the end of 2024 in the June predictions.

However, the outlook is particularly dubious due to the ongoing fighting in the region.

The International Monetary Fund also reduced its Mena growth forecast for 2025 by 0.5% to 3.5%, as well as by 0.3% to 3.9% for 2026.

According to the IMF, energy commodity prices are predicted to fall by 2.6% in 2025, which is more than was assumed in October. This reflects a drop in oil prices caused by poor Chinese demand and robust supply from non-Opec+ countries which has been somewhat offset by increases in petrol costs due to colder-than-expected weather and supply disruptions, notably the ongoing Middle East conflict.