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Fitch Solutions’ research unit BMI has revised its forecast for the UAE’s economy this year to 5.1%, slightly down from 5.2% predicted in October, BMI economists said during a webinar. The oil economy, which accounts for about 25% of GDP, is set to benefit from the gradual unwinding of Opec+’s supply cuts starting April 2025, they explained, adding that oil production is expected to grow at a 4% clip this year, after seeing relatively flat growth in 2024.
“The UAE economy will be the fastest among the GCC economies,” BMI’s MENA Senior Country Risk Analyst Mariette Hanna said. BMI sees oil GDP growing at a 3.1% clip this year, while the non-oil sector is expected to grow further on the back of easing inflationary pressures, especially in the transportation sector, lower borrowing costs, and large infrastructure and construction projects across all emirates.
Ongoing progress in diversification, coupled with high-income population growth, will boost foreign investment in sectors such as real estate, finance and technology, Hanna added.
“Non-oil trade will continue to benefit from the signing of the comprehensive economic partnership agreements,” Hanna said, adding that recent data showed that non-oil trade expanded by 15% y-o-y in value and 6.5% y-o-y in volume in the first nine months of 2024.
BMI expects lower oil prices due to the growth in production to affect oil exports and revenues, which will narrow the UAE’s fiscal surplus from 3.7% of GDP in 2024 to 2.2% in 2025. It also sees the current account surplus narrowing from 8.1% of GDP in 2024 to 7.2% of GDP in 2025.
BMI’s forecast for this year is more optimistic than others’: The International Monetary Fund and the World Bank revised their forecasts for the UAE’s economy this year to 4%. Meanwhile, the Central Bank of the UAE (CBUAE) penciled in a higher growth estimate of 4.5% in 2025 in December.
It’s even more optimistic about 2026, penciling in a higher estimate of 6% GDP growth, with its oil and gas team predicting 10% growth in oil production in the Gulf state next year once Opec+ supply cuts are lifted.
