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The Central Bank of the UAE (CBUAE) is maintaining its 5.6% real GDP growth forecast for 2026 — unchanged from 2025 — signaling confidence in the economy even as international institutions slash their outlooks due to regional conflict, according to the bank’s latest report (pdf).
The reasoning: The CBUAE’s optimism is underpinned by a two-engine growth model, with hydrocarbon GDP expected to jump 7.3% on higher Opec+ quotas and non-oil activity projected to grow at a robust 5.1%, fueled by manufacturing, construction, and financial services.
The CBUAE’s outlook stands in stark contrast to recent downgrades from global firms, with Oxford Economics now seeing the UAE’s GDP contracting by 0.2%, a 4.6 percentage point downgrade from pre-war estimates. Similarly, Goldman Sachs warns the country’s GDP could shrink by around 5% this year if the conflict persists through April.
The CBUAE’s confidence is rooted in a strong 2025 performance, marked by rising oil output — which averaged 3.12 mn bbl / d (a 6.9% y-o-y increase) — solid non-oil momentum, and expanding financial depth, with banking assets reaching AED 5.4 tn and private lending up 18%.
Fiscal and external positions also remain robust, with a AED 61.7 bn surplus in 9M 2025 and general government revenue rising to AED 408.5 bn — significantly bolstered by a 24.4% y-o-y increase in non-tax revenue streams.
Trade and real estate: Non-oil foreign trade jumped 24.6% y-o-y to AED 2.5 tn through 3Q 2025, bolstered by a 45% rise in non-oil exports and an expanding Cepa network. Domestically, residential sales volumes in Abu Dhabi and Dubai climbed 22%, while the tourism sector hosted 23.3 mn guests.
Looking ahead, it expects growth to moderate to 4.4% in 2027 as oil output stabilizes. Meanwhile, inflation is projected to remain contained at 1.8% in 2026 and 2.0% in 2027, “with rent prices and external factors expected to be the primary source of upward inflationary pressures,” according to the report.
