The Central Bank of the UAE (CBUAE) has upgraded its economic growth outlook, reaffirming confidence in the country’s diversified growth model and long-term resilience. The revised projections reflect sustained expansion in non-oil sectors, improving hydrocarbons performance, and stable macroeconomic fundamentals.
According to the latest economic review, the UAE’s real GDP growth is now projected at around 5.0 per cent, with growth expected to strengthen further to approximately 5.2 per cent in the following year. This upward revision marks a positive shift from earlier forecasts and signals renewed momentum across key sectors of the economy.
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Non-Oil Economy Remains the Primary Growth Engine
The central bank highlighted the continued strength of the non-oil economy, which remains the backbone of UAE growth. Sectors such as tourism, real estate, logistics, financial services, manufacturing, and trade have demonstrated strong performance, supported by rising investment inflows and increased business activity.
Government-led reforms, infrastructure expansion, and pro-business policies have played a critical role in sustaining this momentum. The UAE’s focus on economic diversification under national strategies has reduced dependence on hydrocarbons while strengthening private-sector participation.
Non-oil GDP growth is expected to remain robust, reinforcing the UAE’s position as a regional commercial hub and a preferred destination for international businesses and investors.
Hydrocarbon Sector Recovery Adds Support
Alongside non-oil expansion, the hydrocarbon sector is also expected to contribute positively to overall growth. Adjustments in global oil production levels and improved market conditions have supported a gradual recovery in oil output, adding balance to the growth outlook.
This combination of non-oil strength and oil-sector stabilisation underscores the UAE’s ability to navigate global economic fluctuations while maintaining steady growth.
Banking and Financial Sector Shows Stability
The CBUAE also noted continued strength in the banking and financial sector, supported by healthy capital adequacy ratios, strong liquidity, and controlled credit risk. Lending growth has improved, particularly to businesses and priority sectors, while asset quality remains resilient.
Stable financial conditions have enabled banks to support economic expansion through credit availability, reinforcing confidence among corporates and investors.
Inflation Under Control, Monetary Conditions Supportive
Inflation in the UAE remains well contained, benefiting from stable prices, efficient supply chains, and prudent monetary policy. Lower inflationary pressures have helped preserve consumer purchasing power and support business operations, particularly in non-oil sectors.
Interest rate conditions are closely aligned with global monetary trends, ensuring financial stability while maintaining access to capital.
Strong Signal for Investors and Businesses
The central bank’s upgraded outlook sends a strong signal to investors, entrepreneurs, and multinational corporations considering expansion or entry into the UAE market. The combination of economic diversification, regulatory stability, and government support continues to position the UAE as one of the most attractive business environments in the region.
With sustained growth expected across multiple sectors, the UAE remains well placed to capitalise on global trade shifts, regional investment flows, and long-term development initiatives.
