UAE economic growth to accelerate in 2025 and 2026

The UAE’s real GDP growth is expected to remain stable at 4 percent in 2024, accelerating to 4.5 percent and 5.5 percent in 2025 and 2026, respectively.

Growth expectations are underpinned by strong performances in key sectors such as tourism, transportation, financial and insurance services, construction, real estate and communication, the UAE’s central bank said in its quarterly economic review for December 2024.

In the second quarter of 2024 non-oil GDP growth grew to 4.8 percent year on year, up from 4 percent in the previous quarter. This was driven by manufacturing, real estate, trade and transportation and storage.

Non-oil GDP growth is expected to remain strong at 4.9 percent in 2024 and 5 percent in 2025, supported by the government’s strategic plans and policies to attract foreign investments and promote economic diversification.

The comprehensive economic partnership agreements (Cepa) that the UAE has signed with many countries have bolstered its trade partnerships, leading to non-oil trade exceeding AED1.3 trillion ($353.93 billion) in the first half, equivalent to 134 percent of the country’s GDP.

Oil production averaged 2.9 million barrels per day during the first 10 months of 2024 and is expected to grow by 1.3 percent in 2024, accelerating to 2.9 percent in 2025.

The UAE fiscal surplus reached AED65.7 billion, representing a 38.8 percent increase from AED47.4 billion recorded in H1 2023.

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The general government revenue rose by 6.9 percent year on year to AED263.9 billion in the first half, driven by a 22.4 percent increase in tax revenues.

The number of employees under the wage protection system increased by 4 percent annually, while the average employee salary increased by 7.2 percent year on year in September, the review said.