Analysts report that the UAE’s economic outlook remains strong despite global economic uncertainty.

This resilience is largely attributed to increased energy production, a thriving tourism industry, highlighted by Dubai’s 19 million visitors in 2024, steady population growth, now at 12 million nationwide with 4 million in Dubai, and an active pipeline of 3,500 infrastructure and real estate projects.

Continued high public spending and diversification strategies are helping cushion the economy against external challenges, Khaleej Times reports.

Although the 25% tariffs imposed by the US on iron, aluminium, and steel present potential challenges, especially for the UAE’s non-oil GDP, the country remains the second-largest aluminium exporter to the US, shipping 350,000 tonnes in 2024.

This supply plays a critical role in key sectors like aerospace, defence, real estate, and automotive manufacturing.

Furthermore, a newly announced $1.4 trillion investment in a US-based aluminium smelter is expected to double domestic production, further strengthening trade ties and stability.

In addition, non-oil GDP has held steady, underpinned by the UAE government's ongoing diversification initiatives. These strategies are expected to fuel further growth, with ambitious plans to double foreign direct investment (FDI) to $65 billion by 2031 across key sectors such as logistics, finance, renewable energy, and IT.

Meanwhile, Dubai’s Real Estate Strategy 2033 targets an increase in housing supply and aims to boost homeownership to 33%, while also doubling the sector’s contribution to GDP. On the oil front, the UAE's production is projected to reach 3.27 million barrels per day by 2026, in alignment with OPEC+ objectives.

At the same time, Adnoc is advancing plans to raise oil production to five million barrels per day by 2027. The UAE’s 2025 fiscal budget totals Dh71 billion, with Dh28 billion earmarked for social development, pensions, education, and infrastructure, and Dh2.6 billion allocated specifically to transportation and logistics.

While the fiscal surplus is projected to ease to 3% of GDP, stable oil prices and ongoing revenue diversification continue to underpin economic resilience. Despite an IMF forecast of slower non-oil growth across the GCC, down to 3.4%, the UAE is expected to outperform regional peers like Oman and Saudi Arabia, with a projected 4.6% non-oil growth through 2026.

Although the newly imposed 25% US tariffs on steel and aluminium are aimed at imports into the American market, they do not currently impact construction material costs in Dubai. This is because the UAE is not facing equivalent retaliatory duties on its own imports.

“That said, currency fluctuations and broader economic uncertainty arising from global trade tensions may elevate input costs across sectors, including logistics and construction. However, these pressures may be mitigated or even offset by a surge in investor interest, as geopolitical instability elsewhere often reinforces Dubai’s appeal as a haven for capital,” according to the Dubai-based real estate consultancy, Betterhomes.

Indeed, Dubai has emerged as a key destination for Asian investors, particularly from China, as they shift capital away from more volatile markets.

Analysts note that the city’s strategic role as a global trade hub could unlock new opportunities. With companies looking to navigate around tariffs, Dubai may see a rise in re-exports and transshipment activities, especially through its free zones like Jebel Ali Free Zone.