Today's Edition
A SREENIVASA REDDY (ABU DHABI)
Apart from the unwinding of oil production cuts, it is the robust diversification efforts by the UAE and other Gulf Cooperation Council (GCC) nations that have led to higher growth projections for this year, the International Monetary Fund (IMF) said in its October 2025 Regional Economic Outlook released in Dubai on Tuesday.
Jihad Azour, Director of the IMF’s Middle East and Central Asia Department, said the region’s outlook continues to improve despite global uncertainty. “There is more to the story than oil. Non-oil sectors in the GCC are playing an increasingly important role in sustaining growth and creating jobs,” he said at the report’s launch at Dubai International Financial Centre.
According to the IMF, the UAE economy is forecast to expand by 4.8% in 2025, up 0.8 percentage points from its May projection, before accelerating to 5% in 2026. Growth is expected to moderate to 3.9% by 2030, reflecting a stable medium-term trajectory. The Fund also confirmed that the UAE economy grew 4% in 2024, higher than the earlier estimate of 3.8%.
Across the GCC, the IMF projects output to rise by 3.9% in 2025 and 4.3% in 2026, marking upward revisions of 0.9 and 0.2 percentage points respectively from previous forecasts. Saudi Arabia, the region’s largest economy, is expected to grow 4% in both years—an improvement over the earlier projections of 3% and 3.7%.
The IMF attributed these upgrades to rising hydrocarbon production and expanding non-oil activity, as Gulf countries continue to channel investment into logistics, tourism, advanced manufacturing, and technology.
Azour said the wider Middle East and North Africa (MENA) region has shown “remarkable resilience” despite global uncertainty and heightened geopolitical tensions. “We now project MENA GDP growth at 3.3% this year, up from 2.6% in 2024 — a 0.7 percentage-point upward revision since May. Looking ahead, we expect growth to accelerate to 3.7% next year,” he said.
According to the IMF, most regional economies are benefiting from lower inflation, improved financial conditions, and narrower sovereign spreads. Oil-importing economies are also supported by strong tourism, remittance inflows, and agricultural recovery.
Still, the Fund warned that global uncertainty and persistent inflation in advanced economies remain key risks, especially for countries with high borrowing requirements. “This positive outlook comes with significant risks,” Azour said, urging policymakers to rebuild fiscal buffers and push ahead with reforms.
