The UAE is anticipated to maintain its status as one of the fastest-growing economies in the world, with a projected growth rate of approximately 5% in 2026. This robust expansion is bolstered by increased oil production, strong non-oil sector activities, an accommodative fiscal policy, and enhanced trade integration. This economic outlook offers valuable insights for investors and businesses looking to tap into the opportunities in the region over the next year.

Reviewing Economic Performance in 2025

The economic landscape of 2025 set a solid groundwork for progression into 2026. The overall growth was impressive, with both oil and non-oil sectors showing substantial expansion.

– Estimated total GDP growth for 2025: 5.4%
– Oil GDP growth: approximately 5%
– Non-oil GDP growth: approximately 5.5%

The uptick in the oil sector was primarily driven by increased production levels due to adjustments within OPEC+, while the non-oil sector thrived on population growth, robust domestic consumption, and significant investments in infrastructure and technology.

Despite impressive diversification efforts, oil still plays a critical role in the economy, accounting for around 25% of the GDP, a decrease from over 30% in 2013. This ongoing reliance underscores the fact that trends in oil production continue to shape overall economic growth, even as non-oil activities gain prominence in employment and consumption.

Growth Projections for 2026

Looking ahead, the projections for real GDP growth in 2026 are approximately 5.0%. While this marks a slight decline from the highs of 2025, it remains robust compared to global growth rates.

– Comparative growth rates include:
– UAE: ~5.0%
– China: ~4.6%
– United States: ~2.3%
– Eurozone: ~1.1%

This relative outperformance highlights the resilience of the UAE’s economy amidst globally constrained growth dynamics, reaffirming its attractiveness for investors.

Oil Sector: Gradual Production Growth

While oil GDP growth is expected to slightly decrease to around 4.0% in 2026, this still reflects a robust state of affairs. A significant portion of previously constrained supply has already returned to the market.

Key oil production data and forecasts include:

– Average UAE oil output (2025): approximately 3.6 million barrels per day
– Forecast average output (2026): around 3.7 million barrels per day
– Year-on-year production growth, even with flat output: over 5%
– Medium-term capacity target: 5 million barrels per day by ADNOC by 2027

Even with a moderate pace of production increase, ongoing investments in upstream capacity are likely to offer upside potential to oil GDP forecasts. Importantly, oil revenues continue to support fiscal stability and expansionary government expenditures.

Non-Oil Sector: Driving Continued Diversification

The non-oil sector is expected to serve as the main driver of growth in 2026, with projections of a 5.3% increase in non-oil GDP, only slightly below previous levels. Key growth drivers for this sector include:

– High population growth across the emirates
– Strong domestic consumption
– Investment in public and private infrastructure
– Continuous inflow of foreign businesses and professionals

Growth dynamics vary by emirate, with Abu Dhabi’s non-oil economy expanding at a quicker pace than Dubai’s, though Dubai and the northern emirates still show solid growth potential.

The UAE’s diverse economy presents multiple opportunities for investors, particularly in sectors such as financial services, real estate, tourism, and healthcare. As the country transitions towards a knowledge-based economy, businesses in these sectors can anticipate sustainable growth driven by both regional and global market trends.