The World Bank has raised its 2025 economic growth forecast for the UAE to 4.6%, up from 4% earlier this year. This revision reflects strong performance in the country’s non-oil sectors and the gradual phase-out of Opec+ oil production cuts. The UAE’s economy grew by 3.9% in 2024, supported by a 4.6% expansion in non-oil activity, with the Central Bank projecting 4.7% growth in 2025 and non-oil growth at 5.1%.
The UAE’s diversification strategy—focusing on sectors such as technology, tourism, manufacturing, and services—continues to drive economic resilience and reduce dependence on hydrocarbons. This strategy aligns with broader regional trends, with the World Bank also noting expected non-oil growth across Bahrain, Kuwait, and Oman.
Opec+ recently agreed to gradually ease its voluntary production cuts, with monthly increases of 411,000 barrels per day. The production cuts, introduced in late 2023 due to concerns over excess supply and weak demand, are set to be fully phased out by September 2026. This move is expected to support economic growth in oil-exporting countries despite projected lower oil prices.
Globally, the World Bank anticipates economic growth of just 2.3% this year—its slowest non-recession pace since 2008—due to rising trade tensions and policy uncertainty. Nearly 70% of world economies have seen their forecasts downgraded. Nevertheless, Gulf countries are expected to see higher growth over the next few years, with regional output projected to rise to 4.8% by 2027.
While unwinding oil production cuts will aid Gulf economies, the benefits may be limited by declining oil prices and reduced demand from major buyers such as China. This could strain fiscal revenues and dampen growth prospects, the World Bank cautioned.
