The UAE’s economic outlook remains strong, with GDP projected to grow by 5.1% in 2025, up from 3.8% in 2024, according to the Institute of Chartered Accountants in England and Wales (ICAEW) in collaboration with Oxford Economics.
The forecast highlights a resurgence in oil production and continued momentum in non-oil sectors, supported by rising international trade, tourism, and investment in advanced technology.
ICAEW expects UAE oil production to reach an average of 3.8 million barrels per day (bpd) by 2027, as the country works towards expanding capacity to 5 million bpd. The report anticipates a major supply increase between 2027 and 2028, aimed at maximizing oil revenues ahead of a global shift away from fossil fuels.
Meanwhile, non-oil GDP is projected to grow by 4.7% in 2025, sustained by strong PMI readings and record-high foreign trade, which surpassed AED 3 trillion in 2024. The UAE is actively pursuing 27 Comprehensive Economic Partnership Agreements (CEPAs), enhancing market access and trade conditions.
Tourism remains a key driver, with international visitor spending forecast to hit AED 267.5 billion in 2025, making up nearly 13% of GDP. Dubai welcomed 5.3 million international visitors in Q1 2025 — a 3% year-on-year rise. These gains align with the Dubai D33 agenda, which aims to position the emirate as a top global tourism hub.
The report also cites the launch of the US-UAE AI Acceleration initiative, announced during President Trump’s recent visit, as a major step in strengthening technological cooperation and attracting tech investment.
Inflation is expected to average 2.5% in 2025, with housing and recreation in Dubai continuing to be key price drivers.
Saudi Arabia: Strong Rebound in 2025
Saudi Arabia’s economy is also set to accelerate, with ICAEW forecasting 5.2% growth in 2025, up from 1.3% in 2024. Growth will be fueled by increased oil output (averaging 9.7mn bpd) and domestic demand.
Non-oil sectors like construction, trade, and digital services are expanding rapidly under Vision 2030, with non-oil GDP growth projected at 5.3%, driven by job creation and private sector engagement.
GCC and Middle East Outlook: Robust Resilience
Across the region, GCC economies are projected to grow 4.4% in 2025, while Middle East GDP is expected to rise 3.5%, according to ICAEW.
“The region is showing remarkable adaptability,” said Hanadi Khalife, ICAEW’s Head of Middle East. “Investments in tourism, infrastructure, and technology are paying off, reinforcing economic resilience and long-term growth.”
While the US has imposed a 10% tariff on GCC exports, the impact is expected to be minimal. Energy exports are excluded, and only 3% of GCC exports go to the US.
Continued OPEC+ oil supply gains, and strength in tourism, real estate, and capital markets, are supporting a more optimistic regional outlook.
Source: Gulf Business
