According to IMF forecast, Abu Dhabi’s economy is set to grow by 4.2% and Dubai by 3.3% in 2025, set to lead economic momentum amid global slowdown
The International Monetary Fund (IMF) has projected that the United Arab Emirates’ economy will grow by 4% in 2025, underpinned by robust non-oil sector performance and continued infrastructure investment. The IMF’s latest forecast reflects the UAE’s economic resilience, particularly in comparison to other regions facing downward revisions in growth expectations.
Abu Dhabi is expected to outpace the national average, with a projected growth of 4.2% in 2025, climbing further to 5.8% in 2026. Meanwhile, Dubai’s economy is forecast to expand by 3.3% in 2025 and inch upward to 3.5% the following year. These figures reflect a steady and sustainable recovery path for the UAE’s two largest emirates, reinforcing the country’s position as an economic hub in the Gulf.
Non-oil strength drives optimism
Speaking during a media briefing hosted by the Dubai International Financial Centre in partnership with the IMF, Jihad Azour, Director of the IMF’s Middle East and Central Asia Department, noted that the UAE’s projected growth defies a broader regional trend of economic deceleration. He pointed to the strength of the UAE’s non-oil sectors—particularly real estate, financial services, and tourism—as a key driver of this sustained momentum.
Azour highlighted that ongoing investment in infrastructure and diversified economic planning have helped buffer the UAE against external shocks, including fluctuations in oil prices and global economic uncertainty. “The UAE has demonstrated an effective diversification strategy that continues to bear fruit,” he said.
This performance comes at a time when the IMF has revised its broader outlook for the Middle East and North Africa (MENA) region downwards. In its October 2024 projections, the Fund had estimated regional growth of 4% for 2025 and 4.2% for 2026. These figures have now been adjusted to 2.6% and 3.4% respectively.
Varied growth across the GCC
Azour also underscored the diversity within the Gulf Cooperation Council (GCC), noting that differences in economic structure and sovereign wealth levels mean that each country is responding to global challenges in its own way. While some oil-producing nations are experiencing sluggishness due to OPEC+ output curbs and softer commodity prices, others like the UAE have made significant headway in reducing oil dependency.
The UAE’s fiscal prudence, strategic reforms, and investor-friendly policies have further consolidated its status as a regional safe haven for capital and talent. Mega-events, tourism rebounds, and expanding global partnerships have all contributed to a more balanced and resilient economic outlook.
Looking ahead
For 2026, the IMF expects the UAE’s overall economy to accelerate to a 5% growth rate, further evidence that the country’s long-term economic vision is gaining traction. The growth outlook aligns with the UAE’s broader goals under “We the UAE 2031”, the national development strategy that seeks to double the nation’s GDP within a decade.
While global headwinds remain—from geopolitical tensions to financial market volatility—the UAE’s diversification, competitive regulatory environment, and targeted public spending have positioned it to maintain steady economic progress in the years ahead.
In an uncertain global landscape, the UAE continues to stand out as a beacon of measured reform and strategic foresight.
