Today's Edition
SARA ALZAABI (ABU DHABI)
Diversification remains the central thread in the UAE’s growth story as the country pursues its ambition of becoming a global hub for its new economy.
This momentum is reflected in the latest outlook by Standard Chartered Global Research, which has raised its forecast for UAE GDP growth in 2026 to 5%, up from 4%.
The upgrade suggests that the UAE is set to outperform the global economy, which is expected to grow by 3.4%. The strength of the UAE’s performance is being driven largely by the non-oil economy.
Growth in non-oil sectors is expected to reach 4.5% next year, supported by favourable demographics, strong activity levels and a robust property market.
Rising activity in construction, services, tourism and retail continues to bolster the UAE’s credentials as a destination for business and skilled professionals.
Trade is another key pillar of the growth outlook. Overall foreign trade is forecast to surpass $1 trillion by 2026, reinforcing the UAE’s position as a major international trade hub.
Around one-third of this volume is expected to pass through the UAE–Asia corridor, highlighting the country’s deepening links with Asian markets and its growing role in reshaping global supply chains.
Rola Abu Manneh, CEO of UAE, Middle East & Pakistan at Standard Chartered, commented: “The UAE remains a bright spot on the global map, with the nation expected to remain on track to deliver growth at potential for two consecutive years in 2026. As we look toward the projected $1 trillion in foreign trade volumes, the UAE is rapidly cementing its status as a super-connector, navigating seamlessly through global trade fragmentations and thriving within them.”
The outlook is further underpinned by solid financial fundamentals. The UAE continues to post twin fiscal and external surpluses, while strong liquidity conditions are supporting the banking system. Private-sector credit expanded by 9.1% year on year in mid-2025, and the country maintains the lowest loan-to-deposit ratio in the GCC, giving banks ample capacity to expand cross-border lending.
Standard Chartered also highlighted increased diversification of trade routes and rising investment in artificial intelligence as important drivers of future growth.
A similar assessment is reflected in the views of other international institutions.
The World Bank Group, in its Gulf Economic Update, forecasts UAE economic growth to rise to 4.8% in 2025 and average 5% during 2026–2027, supported by diversification efforts, large sovereign wealth fund buffers and stable foreign investment.
