Abu Dhabi GDP poised to grow 3-4% y-o-y in 2Q

Abu Dhabi’s GDP is estimated to grow 3.0- 4.0% y-o-y in 2Q 2025, mainly underpinned by strong growth in the non-oil sector, according to preliminary data (pdf) from the Abu Dhabi Investment Office (Adio). This builds on a strong 1Q performance which saw the emirate's real GDP grow 3.4% y-o-y to reach AED 291 bn.

This momentum also follows a full-year growth of 3.8% in 2024, a sign of consistent post-pandemic economic recovery, according to the report.

The primary engine of growth: The non-oil economy is firing on all cylinders and is estimated to have expanded by 4-6% during the second quarter this year. The sector grew 6.1% in 1Q this year, and accounted for a decade-high 56.2% of the total GDP. “This continues a structural shift in Abu Dhabi’s economic base and highlights the success of diversification efforts,” the report noted.

Inflation prospects: Adio estimates that inflation in the emirate has held steady within the 1-2% range in 2Q 2025, allowing the Central Bank of the UAE (CBUAE) to keep monetary conditions flexible. This also reflects softer global commodity prices and the strength of the AED’s peg to the USD. Abu Dhabi’s consumer price index continued its downward path in June, falling a further 0.7% y-o-y, following a 0.6% dip in May.

ALSO- Oil prices averaged between USD 60-75 per barrel during the second quarter this year, according to the report. This boosted fiscal revenues without provoking inflationary pressures. Earlier this month, Opec+ approved an oil production increase of 547k barrels per day (bbl / d) for September, wrapping its supply restoration strategy ahead of schedule. The hike reverses the bloc’s 2.2 mn bbl / d cut instituted in 2023, and also allows the UAE a 300k bbl / d quota increase ahead of schedule.

Abu Dhabi's economic outlook is promising: “The emirate’s economic outlook is not only stable but increasingly [prospect] rich,” the report noted. “Its performance in 1H 2025 provides further evidence that it is building a future-oriented economy with the resilience and dynamism to compete globally,” the report read.

The bigger picture: TheIMF sees Abu Dhabi’s economy growing 4.2% this year, and a further 5.8% in 2026. The wider UAE economy is anticipated to expand by 4.0% this year, while the MENA region's 2025 growth comes in at 2.6%. Meanwhile, the CBUAE now sees real GDP growing by 4.4% in 2025 — up from 4.0% in 2024 — before accelerating further to 5.4% in 2026. Meanwhile, Fitch Solutions’ research unit BMI recently lowered its GDP growth forecast for the UAE to 4.3% in 2025, down from its earlier prediction of 4.6% but still faster than the 4% recorded last year.