The International Monetary Fund (IMF) forecasts Abu Dhabi's economy to grow by 4.2% in 2025, with growth accelerating to 5.8% in 2026.

Dubai's economy is also projected to expand, reaching 3.3% in 2025 and rising slightly to 3.5% in 2026.

During a media briefing hosted by the Dubai International Financial Centre and the IMF, Jihad Azour, director of the IMF's Middle East and Central Asia department, stated that the UAE's overall economic growth is expected to hit 4% in 2025.

The media briefing also included the release of the IMF's latest regional outlook report, which revised its growth forecast for the Middle East and North Africa (MENA) region down to 2.6% in 2025, a significant reduction from its previous projection of 4% growth in October, Economy Middle East reports.

“Rising trade tensions and exceptional global policy uncertainty are adding to the impact of conflicts and extended oil production cuts to weaken growth prospects for the region,” the IMF said.

Azour attributed the UAE’s resilient growth outlook, despite downward revisions for many other countries, to the strong performance of its non-oil sector, ongoing infrastructure investments, and growth in key sectors such as real estate and finance. He also forecast that the UAE's growth would accelerate to 5% in 2026.

In addition, Azour highlighted that the Gulf Cooperation Council (GCC) states have different economic structures and reserve levels, which leads to varying responses to global market fluctuations.

He also noted that the average growth of MENA region economies was 1.8% in 2024 and is expected to increase to 2.6% in 2025 and 3.4% in 2026.

These projections represent a downgrade from the October 2024 estimates, which had forecast 4% growth for 2025 and 4.2% for 2026.

The IMF report projects GCC economies to grow by 3% in 2025 and 4.1% in 2026. On a national level, the UAE is expected to experience the highest growth, with a 4% increase in 2025 and 5% in 2026. In comparison, Saudi Arabia is forecast to grow by 3% in 2025 and 3.7% in 2026.

Abu Dhabi’s robust growth forecast follows a 3.8% expansion in the emirate’s economy in 2024, reaching a record high of $326.71 billion, according to preliminary estimates from the Statistics Centre – Abu Dhabi (SCAD).

The emirate experienced substantial annual economic growth, driven by a thriving non-oil sector, which saw a robust 6.2% growth rate and achieved its highest-ever contribution of 54.7% to total GDP.