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The International Monetary Fund (IMF) expects Abu Dhabi’s economy to grow at a faster pace than Dubai’s this year, projecting 4.2% growth for the former and 3.3% for the latter, state news agency Wam quotes IMF Middle East and Central Asia Director Jihad Azour as saying during the launch of the Fund’s latest Regional Economic Outlook (pdf) in Dubai. Abu Dhabi’s economy is expected to grow a further 5.8% next year, while Dubai’s could grow 3.5%.
Azour cited continued expansion in Dubai’s non-oil sector, rising infrastructure investment, and strong performances in real estate, construction, and financial services as drivers of economic growth, Al Bayan reports.
How this compares to its UAE outlook: The IMF maintained its UAE-wide growth forecast unchanged at 4% for 2025 and 5% for 2026, amongst the highest in the GCC. Non-oil GDP was projected to grow by 4.5%, driven by tourism, construction, public spending, and financial services.
Zooming out: The Fund cut its 2025 growth forecast for the wider Mena region to 2.6%, down sharply from 4% last October, citing ongoing geopolitical instability, oil market volatility, weak external demand, and trade uncertainty. The growth forecast among the region’s oil exporters was cut to 2.3%, a downward revision from its previous 4% prediction. It also sees importing economies growing 3.4%, down from its initial forecast of 3.9% growth.
GCC economies are expected to outperform the broader region, but 2025 growth is now seen at 3%, down from 4.2% previously. The revision reflects the extension of Opec+ production cuts through April and slower non-oil activity. That said, the IMF sees diversification efforts in the UAE and Saudi Arabia as key to supporting medium-term resilience.
Risks remain tilted to the downside, Azour told Reuters, citing global trade tensions, declining oil prices, and regional conflicts. “Uncertainty could impact the real economy, consumption, [and] investment,” he said, though limited trade integration with the US may reduce direct tariff exposure. The report also flagged the conflict in Gaza and delayed reforms in Egypt as presenting headwinds regionally.
What could help: “Trade diversification, acceleration of structural reforms, and improvement of productivity are all elements that will help the non-oil sector to maintain a strong level of growth," Azour added.
