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The World Bank upgraded its GDP growth forecast for the UAE to 4.8% in 2025, up 0.2 percentage points from its previous outlook in April, the international financial organization said in its latest Middle East, North Africa, Afghanistan, and Pakistan (MENAAP) Economic Update report (pdf). It also upgraded the forecast to 5% in 2026, up 0.1 percentage point from its previous forecast, while further ahead, our economy is expected to accelerate further to 5.1% in 2027.
Driving growth: Strong economic activity across sectors, with significant contributions from the financial services, constructions, transport, and real estate sectors, is behind the upgrade, the World Bank said, adding that it expects stable growth rates over the medium term. This is helped further by increased private investment, stronger exports, and growing consumption, the report said.
ALSO- Increased oil production has been cited by many others as a reason for stronger economic growth next year. Opec+ has been unwinding earlier cuts to production, and had hiked the UAE’s quota.
The World Bank’s upgrade follows the IMF’s recent upgrade of its forecast for the UAE’s growth to 4.8%, up from its 4% forecast in April. Both forecasts are in line with the Central Bank of the UAE’s (CBUAE) revised forecast of 4.9% in 2025. Meanwhile, Standard Chartered sees the economy expanding by 5% in 2025, while Fitch Solutions’ BMI forecasts 4.3% growth.
Inflation in the UAE is expected to accelerate to 2.1% this year, up 0.3 percentage points y-o-y, before easing to 2% in 2026, according to the report. The World Bank also sees our fiscal surplus narrowing by 0.4 percentage point y-o-y to 4.4% in 2025, before widening to 4.9% next year. Meanwhile, the current account surplus is expected to narrow by 0.7 percentage points to 7.1% this year, before rebounding to 7.7% in 2026.
The GCC region at large is expected to expand at 3.5% this year, up 0.3 percentage points from the World Bank’s last forecast, and significantly higher than the 2.2% growth achieved in 2024, according to the report. This uptick is mainly driven by the phasing out of OPEC+ production cuts, and by robust expansion in non-oil sectors.
