The World Bank forecasts robust 4% growth for the UAE economy in 2025 and 2026, surpassing last year's performance.

While the 2025 growth forecast is slightly revised down by 0.1% from the June 2024 estimate, it remains above last year's 3.3%, which was downgraded by 0.6% in the latest Global Economic Prospects report.

The World Bank affirmed that the UAE will remain the fastest-growing economy in the Gulf region in 2025, surpassing Saudi Arabia (3.4%), Bahrain (3.3%), Qatar (2.7%), Oman (2.4%), and Kuwait (1.7%).

The institution also raised the UAE’s 2026 growth forecast by 0.1% to 4.1%, making it the third-fastest-growing economy in the GCC (Gulf Cooperation Council), behind Qatar (5.5%) and Saudi Arabia (5.4%).

Regionally, the World Bank cut the GCC’s growth forecast for 2025 by 1.4% to 3.3%, but raised the projection for 2026 to 4.6%, an increase of 1.1%.

Whereas in 2024, GCC growth is estimated to have accelerated to 1.6%, driven mainly by strong non-oil activity, supported by healthy labour markets and a rebound in capital inflows.

In addition, the World Bank noted that monetary easing in GCC countries is expected to continue, aligning with anticipated US monetary policy changes and favourable financial conditions, which will support economic activity throughout the forecast period. 

Growth in the Middle East and North Africa (MENA) is projected to rise to 3.4% in 2025 and 4.1% in 2026, driven mainly by the gradual increase in oil production, Khaleej Times reports.

The 2025 outlook has been revised down by 0.8 percentage points, primarily due to OPEC+ members extending voluntary oil production cuts, which were initially expected to end in 2024 according to June projections. 

However, the forecast remains highly uncertain due to the ongoing conflict in the region.

The International Monetary Fund (IMF) also lowered its MENA growth forecast for 2025 by 0.5% to 3.5% and for 2026 by 0.3% to 3.9%.

The IMF stated that energy commodity prices are projected to fall by 2.6% in 2025, a sharper decline than previously expected in October. This drop is driven by weaker Chinese demand and increased supply from non-OPEC+ countries, although it is partially offset by rising gas prices due to colder-than-expected weather and supply disruptions, including the ongoing conflict in the Middle East.