Today's Edition
A. SREENIVASA REDDY (ABU DHABI)
The UAE economy is projected to grow at 4% in 2025 and 4.1% in 2026, according to the latest World Bank forecast.
In its January 2025 update, the World Bank estimates UAE growth for 2024 at 3.3%, 0.6 percentage points lower than its June 2024 projection. The forecast for 2025 has been reduced by 0.1 percentage points compared to the June report, while the 2026 forecast has been revised upwards by 0.1 percentage points.
Globally, growth is expected to stabilise at 2.7% in 2025-26, supported by easing inflation and accommodative monetary policies. However, this modest growth reflects ongoing challenges, including geopolitical tensions, shifts in trade policies, elevated debt levels, climate-related natural disasters, and weak structural reforms.
Emerging market and developing economies (EMDEs), which contribute 60% of global growth, continue to face slower progress in catching up with advanced economies, with low-income countries (LICs) particularly affected.
In the Middle East and North Africa (MENA) region, economic growth is forecast to strengthen in 2025-26, supported by robust domestic demand and a recovery from recent challenges. This marks a positive contrast to regions like East Asia and Europe, where growth is expected to moderate. Key drivers for the MENA region include investments in non-oil sectors, infrastructure development, and policies aimed at economic diversification, particularly in the Gulf Cooperation Council (GCC) countries.
Growth in GCC economies is projected to rise to 3.3% in 2025 and 4.6% in 2026. However, the forecast for 2025 has been downgraded by 1.4 percentage points compared to the June estimates, reflecting the extension of voluntary production cuts by OPEC+.
