The World Bank projects that the economic growth in the United Arab Emirates will continue on an upward trajectory, reaching 4.6% by 2025, and stabilizing at 4.9% for both 2026 and 2027.
The World Bank has emphasized that non-oil sectors in the UAE remain a critical engine for growth, with an anticipated growth rate of 4.9% in 2025.
According to the Gulf Economic Update report released by the World Bank, which relies on data available as of June 1, the economic growth in the Gulf Cooperation Council (GCC) countries is expected to rise to 3.2% in 2025 and 4.5% in 2026.
The World Bank attributes this growth to the robust expansion of non-oil sectors, which significantly contribute to the economic performance of the Gulf economies.
As outlined in the latest Gulf Economic Update report, the region experienced a notable economic growth of 1.7% in 2024, compared to just 0.3% in 2023.
The non-oil sector continued to demonstrate resilience, growing by 3.7%, with private consumption, investment, and structural reforms in the GCC countries playing a significant role in this growth.
In Bahrain, growth is projected to stabilize at 3.5% in 2025, while Kuwait is expected to see a substantial recovery with growth reaching 2.2% in 2025.
The growth rate in Oman is expected to gradually accelerate to 3% in 2025, up from 1.7% in 2024, reaching 3.7% in 2026 and 4% by 2027.
Qatar’s economic growth is forecasted to remain stable at 2.4% in 2025, down from 2.6% in 2024, before accelerating to an average of 6.5% in 2026-2027.
In Saudi Arabia, the World Bank anticipates a continued economic recovery, with growth at 2.8% in 2025 and an average of 4.6% in 2026-2027.
The report also highlights challenges arising from uncertainties in global trade, where the risk of a global economic slowdown poses negative implications for the region.
It encourages rapid reform measures aimed at diversifying economic activities and enhancing regional trade to mitigate these risks within the GCC countries.
According to Safaa Al-Kawkli, the World Bank’s regional director for the GCC, the resilience of GCC nations in the face of global uncertainty and their ongoing commitment to economic diversification underline their strong dedication to achieving long-term prosperity.
She added that strategic policies to support public finances, targeted investments, a strong focus on innovation and entrepreneurship, and creating job opportunities for youth are essential to sustaining growth and stability.
The World Bank’s report titled “Smart Spending and Stronger Economic Outcomes: Public Finance Policies for GCC Prosperity” discusses the effectiveness of public finance policies in achieving macroeconomic stability and stimulating growth.
This topic is particularly significant as fluctuations in oil prices exert pressure on public budgets in many countries in the region.
The report concludes that government spending in GCC countries has effectively supported economic stability, especially during periods of recession.
Results indicate that an increase in public financial expenditures by one unit leads to a rise in non-oil output by between 0.1 and 0.45 units in the region.