The IMF projects the UAE’s economy to grow by 4.8 percent in 2025, rising to about 5 percent in 2026, the highest growth rate among GCC countries
The International Monetary Fund (IMF) expects Abu Dhabi’s economy to grow by around 6 percent, and the Emirate of Dubai to record growth of 3.4 percent during the current year 2025.
The forecast for the two emirates was revealed by Dr. Jihad Azour, director of the Middle East and Central Asia Department at the IMF, during a press conference organized by the Dubai International Financial Center (DIFC) in cooperation with the Fund, under the title “IMF Regional Economic Outlook: Middle East and North Africa Report.”
UAE’s economy to grow by 4.8 percent in 2025
Dr. Azour said the IMF projects the UAE’s economy to grow by 4.8 percent in 2025, rising to about 5 percent in 2026, the highest growth rate among Gulf Cooperation Council (GCC) countries, following the strong performance of the UAE economy this year.
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’s economy, 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 UAE’s recently revised forecast reflects robust non-hydrocarbon sector growth, recovery in hydrocarbon production, and strong performance in key areas such as tourism, construction, financial services and major infrastructure projects.
The UAE’s economic growth rate is expected to significantly outpace the projected global growth slowdown, which the IMF forecasts to decelerate from 3.3 percent in 2024 to 3.2 percent in 2025, and further to 3.1 percent in 2026. Advanced economies are expected to grow around 1.5 percent, while emerging market and developing economies will clock in just above 4 percent.
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Middle East and Central Asia to grow 3.5 percent in 2025
The Middle East and Central Asia region, of which the UAE is a significant part, is anticipated to see accelerating growth, from 2.6 percent in 2024 to 3.5 percent in 2025 and 3.8 percent in 2026. This projection for 2025 represents a 0.5 percentage point upward revision compared to earlier forecasts made in April 2025.
The improved outlook largely reflects positive developments in Gulf Cooperation Council (GCC) countries, including the UAE and Saudi Arabia, supported by the unwinding of oil production cuts and strengthening regional economic activities.
The IMF’s senior economist, Said Bakhache, who led the mission to the UAE in late 2025, highlighted the factors underpinning the UAE’s strong economic momentum. He emphasized that the country’s success in economic diversification and expanding exports are key drivers lifting the economy well above global growth averages.
Inflation is projected to be moderate at approximately 1.6 percent in 2025 and around 2 percent over the medium term, with price pressures primarily coming from the housing market, but goods prices are expected to remain subdued.
Moreover, strong sovereign reserves and ongoing economic reforms contribute to balanced risks and overall resilience to global uncertainties, including geopolitical tensions and oil market volatility.
