UAE growth forecast leapfrogs global trend, IMF report says

The International Monetary Fund (IMF) has significantly revised its growth projections for the United Arab Emirates (UAE), highlighting the nation’s economic resilience amidst global uncertainties. In its latest World Economic Outlook, the IMF now anticipates the UAE’s real GDP to grow by 4.8% in 2025, up from its April estimate, with a further acceleration to 5.0% in 2026. This optimistic outlook contrasts with a global economic slowdown, where growth is expected to decline from 3.3% in 2024 to 3.1% in 2026. Advanced economies are projected to grow at a modest 1.5%, while emerging markets hover just above 4%. The Middle East and Central Asia are set to see growth rise from 2.6% in 2024 to 3.8% in 2026, with the UAE leading the charge. The IMF attributes the UAE’s robust performance to its diversified economy, strong financial buffers, and strategic reforms. Key drivers include a widening current account surplus, bolstered by non-hydrocarbon exports, and deepening trade agreements with nations like India, Indonesia, Türkiye, and South Korea. The UAE’s financial sector remains stable, with well-capitalized banks, declining non-performing loans, and innovative measures such as the Digital Dirham and stablecoin regulation. The real estate market continues to thrive, supported by population growth and foreign investment, though the IMF cautions against potential shifts in capital flows. Structural reforms in infrastructure, sustainability, and AI further cement the UAE’s position as a forward-looking economic hub. Looking ahead, the UAE’s growth trajectory remains promising, underpinned by sound fiscal policies, regulatory advancements, and a commitment to long-term reforms.