The Central Bank of the UAE has revised its GDP growth forecast for 2025, increasing it to 5% from the previous estimate of 4.9% made in September 2025. This adjustment is supported by an anticipated 4.9% growth in the non-oil sector and a robust 5.4% recovery in the oil sector.
According to the central bank’s quarterly report, the UAE’s economy is expected to see growth accelerate to 5.2% in 2026, propelled by stronger outputs in both the oil and non-oil sectors.
The report highlights the UAE economy’s strong resilience amid global instability, evidenced by a notable GDP growth of 4.5% year-on-year in the second quarter of 2025, driven by solid performance in non-oil sectors, particularly financial services, manufacturing, and construction. Non-oil GDP growth was strong at 5.3% in the first quarter and 6.1% in the second quarter of 2025.
Banking Sector
On another note, the report indicates that the banking sector has shown remarkable stability, with total assets rising by 18.1% year-on-year, reaching AED 5.2 trillion by the end of the third quarter of 2025. The loan portfolio increased by 14.7% annually, while deposits enjoyed a 15.4% yearly growth during the same period, along with improved asset quality and a 20.2% decline in non-performing loans.
Banks maintained healthy capital reserves, with a capital adequacy ratio of 17.4% in the third quarter of 2025, and overall asset quality improved, as the ratio of net performing loans decreased to 1.6%.
Interest Rates
The report outlined changes in local interest rates, which decreased to 4.15% at the end of the third quarter, followed by another reduction in October to 3.90%. Market interest rates in the UAE followed the same trend, with the average interest rate on overnight dirham deposits dropping by 8 basis points by the end of the third quarter.
Foreign Trade
UAE’s non-oil foreign trade recorded significant annual growth of 23.6% during the first half of 2025, totaling AED 1.62 trillion.
Non-oil exports rose by 45.3% year-on-year, amounting to AED 360.1 billion, primarily driven by increases in gold, aluminum, and jewelry exports.
Switzerland emerged as the leading destination for non-oil exports with an 18.2% share, followed by India (14.3%) and Hong Kong (10.2%). Gold constituted 54.3% of total non-oil exports, with jewelry following at 5% and aluminum at 4.5%.
Re-exports also increased by 11%, reaching AED 332.6 billion, with Saudi Arabia being the top partner, holding a 15.5% share, followed by Iraq (10.4%) and India (6.8%). Communication equipment made up the largest portion of re-exports at 20.1%.
On the import side, there was a 21.5% increase, totaling AED 928.9 billion, with China remaining the largest trading partner, holding an 18.2% share, followed by India and the United States. Gold topped the list of imported goods, accounting for 27.8%.
Oil Production
The average oil production during the first nine months of 2025 was approximately 3.035 million barrels per day, reflecting a 3.7% year-on-year increase, with a notable acceleration observed since June following a review of production quotas. Additionally, gas production grew by 5% in the third quarter, supported by heightened domestic demand.
Labor Market and Wages
The number of employees covered by the wage protection system rose by 13.9% by September 2025, while wages saw a modest increase of 0.3%, reflecting improvements in economic activity without significant inflationary pressures.
Inflation
The report indicated that the inflation rate stood at 1.1% in the third quarter of 2025, with energy costs remaining within contraction territory. Consequently, the Central Bank of the UAE revised its inflation forecast for 2025 down to 1.3% from 1.5%, amidst ongoing declines in transportation costs and non-oil goods prices.
Insurance Sector
The insurance sector experienced a growth in written premiums, rising by 13.7% to AED 57.8 billion, along with improvements in solvency and profitability metrics. This growth was largely driven by a 14.5% year-on-year increase in property and liability insurance premiums, a 13.9% rise in health insurance premiums, and a 9.6% increase in life and savings premiums, mainly due to higher group life insurance premiums, with returns on assets reaching 0.9%.
There were 58 licensed insurance companies, including 22 traditional national insurers, 10 national takaful insurers, and 26 branches of foreign insurance companies operating in the country, while the number of professions related to insurance grew to 514 roles.