The World Bank maintained its forecast for the UAE’s GDP in 2025 at 4.8%, while seeing GDP average 5% in FY 2026-2027, amid strong non-oil momentum and oil production hikes as Opec+ reverses its supply cut-focused policy from earlier this year, it said in its latest Gulf Economic Update (pdf). The UAE has already reported 4.2% growth for 1H 2025.

Driving next year's growth is a forecasted 5.2% expansion in the UAE's non-oil sector, which makes up over 75% of the country's total GDP, making the UAE “the most economically diversified GCC economy,” the World Bank said. The oil sector is also set to grow 4.5% in 2026-2027, from an expected 3.9% in 2025.

Meanwhile, unemployment is expected to hover around 2.1%, below the GCC average, though with some gender and age disparities.

The World Bank kept its headline inflation forecast at 2% in 2026, and anticipated inflationary pressures could stem from “the alignment of interest rate cuts with that of the Federal Reserve to maintain the parity of the [AED] with the [USD],” the report said. The first half of 2025 saw accelerated inflation rates in sectors including recreation and culture (6%), ins. and financial services (4.4%), and housing, water, electricity, and gas (4%). Property and rentals inflation are also anticipated to rise on the back of population growth.

It also expects the UAE’s fiscal surplus to average 5% of GDP over the medium term, backed by its “strength and scale of sovereign wealth funds (SWFs).” Meanwhile, it revised its forecast for the current account surplus to 7.4% of GDP in 2025, from a previously estimated 7.1%, and to 7.8% in 2026 from its previous estimation of 7.7%. It’s expected to shrink to 5.7% in 2027, according to the report.

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