The UAE’s economy is poised for substantial growth, according to the Central Bank of the UAE (CBUAE). Its latest Quarterly Economic Review forecasts a 4.7 percent GDP increase in 2025, with further acceleration to 5.7 percent in 2026.
The report highlighted that the UAE’s non-oil trade surpassed AED2 trillion in the first nine months of 2024, representing a 14.9 percent year-on-year rise, “reflecting the successful implementation of the UAE’s economic diversification plans and strengthening ties with its key trading partners.”
Sectoral growth projections
The non-hydrocarbon sector is anticipated to expand by 5.1 percent in 2025, as noted by the CBUAE. Similarly, the hydrocarbon sector is set for a 3.6 percent growth in 2025, followed by an impressive 8.5 percent increase in 2026. This growth is supported by gradual increases in oil production as OPEC+ lifts production cuts, alongside ongoing and planned upstream and midstream oil and gas projects.
Passenger traffic surge at UAE airports
The report also indicated that the UAE’s airports experienced a 10 percent increase in passenger traffic in 2024. “Abu Dhabi Airports reported significant growth, handling 29.4 million passengers in 2024, a 28.1 percent increase from 2023, driven by network expansion, strategic partnerships, and a focus on delivering a world-class passenger experience,” the report stated. “Abu Dhabi’s expanding role as a leisure and business travel hub significantly contributes to the UAE’s economic diversification efforts.”
Meanwhile, Dubai International Airport achieved a new milestone in 2024, welcoming 92.3 million passengers, surpassing its previous peak of 89.1 million in 2018. The UAE’s tourism and aviation sectors continue to be key drivers of economic diversification, according to the report.
The sustained growth in these sectors “reflects the success of planned initiatives aimed at enhancing connectivity, expanding hospitality infrastructure, and promoting the UAE as a global destination for leisure and business travel.”
Read more: UAE central bank issues new AED100 polymer banknote with advanced security features
Resilience of the banking sector
The UAE banking sector remains resilient, with total assets reaching AED4.56 trillion by the end of 2024. Lending grew by 9.5 percent year-on-year, driven by increased retail and corporate borrowing, while deposit growth reached 12.9 percent in Q4 2024. The insurance sector also exhibited significant growth, with gross written premiums rising by 21.4 percent year-on-year, and gross paid claims increasing by 35.8 percent.
Government fiscal health
The report further noted that the UAE government recorded a fiscal surplus of AED96.3 billion (6.5 percent of GDP) in the first nine months of 2024, a 57.5 percent increase from the same period in 2023, driven by a 22.1 percent rise in tax revenues. Government capital expenditure increased by 15.4 percent year-on-year, reinforcing its commitment to infrastructure development and economic expansion.
Controlled inflation rates
Inflation in the UAE remained well-controlled at 1.7 percent in 2024, significantly below the global average of 5.7 percent. The CBUAE maintained its 2025 inflation forecast for the UAE at 2.0 percent, with non-tradable components of the consumer basket expected to be the main drivers, partially offset by moderating energy prices.
Import sector growth
The UAE’s import sector reached AED1.177 trillion in the first nine months of 2024, expanding by 12.9 percent year-on-year, with China, India, and the US identified as the top trading partners. Gold continued to be a vital trade commodity, accounting for 23.5 percent of total imports and 48.6 percent of total non-oil exports.
