Today's Edition
KHALED AL KHAWALDEH (ABU DHABI)
Abu Dhabi's robust non-oil growth is leading the region as it continues to diversify itself away from oil amid prolonged production cuts. According to global consulting firm PWC's latest report, the UAE's non-oil GDP is set to grow by 4.5% in 2025 based on IMF data.
The Middle East Economy Watch indicates sustained regional economic expansion - largely underpinned by strong non-oil activity - with the UAE at the forefront.
Abu Dhabi's non-oil sector recorded a 6.6% year-on-year growth in Q3 2024 – one of the highest in the Gulf – fuelled by gains in financial services and transportation.
PWC predicts that the UAE, led by Abu Dhabi, will continue to set the benchmark for non-oil performance amid extended OPEC+ production cuts into 2026, aiming to stabilise oil prices in a climate of weaker global demand.
"Despite global uncertainties, the Middle East continues to demonstrate strong economic growth and resilience. Business leaders remain confident in the region's economic prospects, with non-oil sector expansion, fiscal policy reforms, and strategic investments positioning GCC economies for sustained and diversified prosperity in 2025," said Stephen Anderson, Partner, Middle East Strategy Leader at PwC Middle East.
The UAE's non-oil sector outlook remains buoyant. According to the report, the country's strategic investments, diversification policies, and ongoing infrastructure projects continue to position it as a regional leader for sustainable growth. At the same time, GCC nations – led by the UAE – are introducing corporate taxes in line with OECD's global minimum tax rules starting 2025, reflecting a broader effort to strengthen fiscal frameworks and enhance revenue diversification.
In Abu Dhabi, the continued rise of Abu Dhabi Global Markets as a financial hub, as well as better transport links spurred on through infrastructure projects were highlighted as foundational to the capital's standout non-oil performance last year.
According to the report, the UAE's outlook is further supported by high levels of CEO confidence. PwC's 28th Annual CEO Survey revealed that 80% of UAE chief executives anticipate economic growth in 2025, underscoring optimism for the country's economic trajectory. Moreover, according to the survey, the UAE is the seventh most likely country where global CEOs are planning to invest, outside of their home territory.
At the same time, PWC believes the extension of OPEC+ production cuts has prompted renewed caution on the oil front, but industry experts see this as an opportunity to intensify diversification efforts.
"OPEC+ has been remarkably effective at coordinating oil production over the past decade, shaping both global energy markets and the Middle East's economic trajectory," Richard Boxshall, Partner and Chief Economist, PwC Middle East, said.
"However, there remains uncertainty over how OPEC+ will respond to evolving factors, including the Trump presidency, geopolitical developments in the region, and shifting dynamics in the oil sector. These factors intensify the need and urgency for continued non-oil sector expansion and fiscal adaptability across GCC economies."
