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Fitch Solutions’ research unit BMI revised its GDP growth forecast for the UAE to 5.2% in 2025, marking a 0.2 percentage-point increase from its latest forecast in October, it said in a recent research note. BMI now sees our economy accelerating further to 5.6% next year, up by 0.4 percentage points from last month’s projection.
Driving the expansion: The upgrade is mainly driven by strong 2Q data from Dubai, which surprised to the upside, a higher oil production forecast, and a stronger non-oil sector in Abu Dhabi. A narrower net exports deficit and robust fixed investment will also drive accelerated growth in 2026.
REMEMBER- Dubai’s GDP grew 4.7% y-o-y in 2Q 2025 to hit AED 122 bn, outpacing the 4% growth recorded in 1Q — the highest annual growth rate recorded in four and a half years. Abu Dhabi’s GDP grew 3.8% y-o-y to AED 306.3 bn in 2Q, driven by a 6.6% expansion in the non-oil economy to a record AED 174.1 bn.
How it compares to other forecasts: BMI’s forecast is more optimistic than the IMF and World Bank’s estimates of 4.8% growth in 2025 and 5% growth in 2026. The CBUAE had also expected the UAE’s real GDP to grow at a 4.9% clip in 2025 and 5.3% in 2026.
BMI now sees the UAE’s non-oil GDP next year growing at a 5.5% clip, up from 5.3% this year, according to the note. Non-oil sector growth will be driven by ongoing diversification initiatives, the expansion of trade supported by comprehensive partnership agreements, monetary easing policies, and government initiatives to boost the real estate sector and AI adoption, the note says.
Higher oil production will help boost the oil sector’s growth from 4.9% in 2025 to 5.8% in 2026, BMI states. The reading comes in below the 7% y-o-y growth projected for the oil sector during the first six months of 2026, per BMI’s predictions at its webinar last month, and comes as Opec+ decides to keep oil supply unchanged during 1Q 2026.
Potential risks: BMI warns that downside risks could stem from a potential oil supply glut, which could weigh on oil prices and lead Opec+ to temporarily halt production increases. A slower global economy could also weigh on the UAE’s non-oil sector.
