The ICAEW sees the UAE’s economy driving the GCC’s GDP growth in 2026, with our GDP being forecast to accelerate from 4.9% this year to 5.6% in 2026, according to ICAEW’s latest Economic Update Quarterly report prepared by Oxford Economics. This will mainly be driven by a robust non-oil sector, especially in areas like tourism, trade and financial services, combined with a pickup in oil output as Opec+ expected in 2H 2026.

“Despite some moderation in 1H, we expect non-oil GDP to expand by 4.7% this year and cool slightly to a 4.3% expansion in 2026, supported by sustained trade activity, robust consumption, rapid population growth and continued policy-driven diversification,” the report reads. The UAE’s GDP grew 3.9% in 1Q 2025.

Its forecast for this year represents a downward revision by 0.2 percentage points from its previous forecast, but the report did not mention the reason behind the downgrade.

How the forecast compares: ICAEW readings match the CBUAE’s 2025 forecast of 4.9%, though its forecast for next year is more optimistic than CBUAE’s expectation of 5.3% growth. BMI, however, agrees that the UAE’s growth could come in at 5.6% next year, but expects 5.2% growth in 2025, while it penciled in a higher 5.5% growth for the non-oil sector for next year. Meanwhile, the IMF and World Bank estimate 4.8% growth in 2025 and 5% growth in 2026

Our oil output is expected to accelerate to 3.41 mn bpd in December and remain at this level until 2H of 2026. It is anticipated to edge up to an average of 4 mn bpd in 2027 thanks to efforts to expand oil production on the back of Adnoc’s push to boost capacity.

Other factors driving growth: Anticipated growth in 2026 for the UAE is largely fueled by Dubai's exceptional 1H growth, driven by robust trade and tourism, alongside a slate of comprehensive economic agreements helping boost non-oil trade.

ICAEW sees inflation averaging 1.9% in 2025 before reaching 2.5% in 2026, slightly higher than the CBUAE’s forecast of 1.8% in 2026, and lower than the IMF and the World Bank’s 2% forecast. While ICAEW sees a drop in energy prices limiting a rise in prices, pressure persists from elevated housing costs, which are expected to linger until more supply becomes available in the coming years.

The GCC at large: The ICAEW revised down its GCC’s GDP growth for 2026 to 4.4%, down 0.2 percentage points from its previous forecast for the year. It maintains its outlook for 4.1% growth this year. The downward revision is attributed to OPEC+ group’s decision to halt oil pump for the 1Q in 2026 before resuming normal rates of production during 2H in 2026 and throughout 2027.

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