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The UAE’s headline GDP is expected to grow at a 5% clip in 2025, up from an estimated 3.7% in 2024, according to an Emirates NBD Research report (pdf). The bank’s forecast is driven by its expectations of the country’s oil and non-oil sectors expanding at the same pace of 5% throughout the year.
Driving the growth for the UAE: “Easing oil production curbs will support the oil sector while expansionary budgets, major project works, and lower interest rates will give non-oil activity a boost in 2025,” the report reads.
It’s a mixed bag for the UAE’s growth prospects for the year: The World Bank recently issued a more conservative estimate of 4.0% growth in 2025, while the Arab Monetary Fund said back in July that it sees the UAE’s GDP accelerating to 6.2% in 2025. Meanwhile, the Central Bank of the UAE penciled in 4.5% growth in 2025, down from an earlier projection of 6% back in September.
ZOOMING IN ON DUBAI-
Emirates NBD penciled in 3.7% growth for Dubai this year, accelerating from an estimated 3.2% in 2024. The government’s recently approved record AED 272 bn budget for 2025-2027 — a significant portion of which will be allocated for infrastructure spending — will be a primary driver of growth for the emirate, Emirates NBD said, with size of the budget supporting the bank’s “view that growth will remain constructive over the coming years.”
Government reforms and targeted investments have boosted the emirate’s position as an attractive hub for foreign investment, Emirates NBD said, prompting expectations of further inflows into “an increasingly broad spectrum of industries supporting large levels of government investment into infrastructure.”
REMEMBER- Projected expenditure for Dubai during the 2025 fiscal year is AED 86.26 bn, with revenues expected to total AED 97.7 bn. The final spending plan sets out a 9% y-o-y increase in expenditure compared to 2024’s budget of AED 79.1 bn. The government expects to achieve an operating surplus of up to 4% of 2025’s GDP. The budget allocates 46% of spending to infrastructure, with projects including roads, tunnels, bridges, transportation systems, sewage stations, parks, renewables facilities, and a rainwater drainage network.
