Fitch Solutions’ research unit BMI revised upward its GDP growth forecast for the UAE to 5% in 2025, marking a 0.7 percentage point increase from its latest forecast in July, MENA Country Risk Senior Analyst Mariette Kas-Hanna said in a webinar attended by EnterpriseAM. BMI expects our economy to accelerate further to hit 5.2% next year, marking a 0.4 percentage point decrease from the July forecast. 

The rationale: The upgrade is mainly attributed to Abu Dhabi’s strong non-oil sector performance in 2Q 2025, with the emirate contributing 60% to the UAE’s GDP, according to a BMI note. The outlook is also boosted by “sustained reform momentum and robust project spending, which drove strong performance in the construction, financial, real estate, and the transport and storage sectors,” Hanna said.

This helped the UAE’s economy navigate the negative impacts of weaker oil prices, heightened market uncertainty and regional tensions, which disrupted aviation during 2Q 2025. Abu Dhabi’s strong growth also offset Dubai’s likely weaker growth given its exposure to global demand, the analysts said.

Abu Dhabi’s growth forecast for 2025 was also revised upward to 5.9%, up 0.9 percentage points from July’s forecast. BMI sees its GDP growth decelerating to 5.4% in 2026.
BMI’s revision follows a recent upgrade to our growth forecasts from the IMF and World Bank’s to 4.8% this year, which is broadly in line with the Central Bank of the UAE’s (CBUAE) revised forecast of 4.9% in 2025. Standard Chartered also sees the economy expanding by 5% in 2025.

The acceleration of growth in 2026 is based on expectations of elevated growth in both the oil and non-oil sectors, with 1H 2026 expected to maintain the trend of 2025, helped by the lifting of OPEC+ production cuts. The oil sector’s growth is forecast to stabilize at 7% y-o-y in the first six months of next year, while the non-oil sector will expand 5.8% y-o-y, boosted by easing geopolitical tensions, according to the note
The non-oil sector is expected to see a pickup over the next couple of years, supported by trade and economic partnership agreements between the UAE and several countries, with 13 agreements having entered into force. This is widely predicted to boost non-oil exports and re-exports, BMI analysts said in the webinar.
REFRESHER- The UAE’s CEPA program underpins its goal of pushing foreign trade to USD 1 tn by 2031. Non-oil foreign trade jumped 24% y-o-y to nearly AED 1.7 tn in 1H 2025, with trade contributing 15.6% of non-oil GDP in 1Q 2025. The sector is now on track to hit AED 4 tn by 2027 — four years ahead of the original 2031 target.
Downside risks stem from a potential oil supply glut, which could weigh on oil prices, as well as renewed regional tensions, according to the note. BMI warned about the possibility of pausing or decelerating the phasing out of supply restrictions by Opec+, though the research unit believes that the cartel members will be reluctant to renew cuts.

REGIONALLY- GCC growth is forecast to accelerate to 4.2% next year, up from 3.9% projected in 2025, with the uptick driven mainly by the accelerated phasing out of Opec+ production cuts, and robust performance of the region’s non-oil sectors due to strong spending on projects as countries sustain their diversification efforts. Inflation in the GCC could also pick up to 1.8% in 2026 as a result of global food price increases, but “will remain benign and slightly lower than historical average.”

MENA region growth is also expected to accelerate for the second consecutive year to 3.6% in 2026, up from 3% in 2025, supported by stronger growth forecasts across most countries in the region amid contained inflation, lower borrowing costs, and de-escalating geopolitical risks, BMI analysts said in the webinar. Growth in North Africa is projected to be 4.1% in 2026, up from 4% in 2025, driven by faster growth in Egypt, BMI’s Ramona Moubarak said.

Tags: