The Central Bank of the UAE (CBUAE) has released a positive forecast for the country’s economic future. Real GDP is projected to grow by 4.9% in 2025 and accelerate to 5.3% in 2026. This optimistic outlook is driven by robust performance in both the non-hydrocarbon and hydrocarbon sectors, reflecting the success of the nation’s economic diversification strategy. The non-hydrocarbon sector, which includes key areas like manufacturing, financial services, and tourism, is a primary engine of this growth.
Key Sectors Driving the Economy
- Non-Hydrocarbon Sector: This sector is expected to grow by 4.5% in 2025 and 4.8% in 2026.
- Hydrocarbon Sector: Supported by updated OPEC+ production plans, this sector is forecast to expand by 5.8% in 2025 and 6.5% in 2026.
- Inflation: The CBUAE has revised its inflation forecast downward for 2025 to 1.5%, largely due to declining energy costs. Inflation is expected to rise slightly to 1.8% in 2026.
Financial and Real Estate Market Performance
The UAE’s banking system remains resilient, with a strong capital adequacy ratio and stable liquidity. Deposits and loan portfolios have seen significant year-on-year growth. The real estate market also maintains momentum, with sales transactions increasing, particularly in off-plan sales. Capital markets, including the Dubai and Abu Dhabi stock exchanges, have also performed strongly.
