UAE economy to grow 4% in 2025, faster than last year: World Bank report

The UAE economy is set to see a robust growth of four percent between 2025 and 2026, significantly higher than last year, according to the latest report by the World Bank. 

While the projected growth is slightly down by 0.1 percent from the World Bank’s forecast in June 2024, the UAE’s growth projection for 2025 is higher than last year’s 3.3 percent. 

As per the World Bank’s report, the UAE’s economy will emerge as the fastest-growing economy in the Gulf region in 2025, surpassing Saudi Arabia (3.4 percent), Bahrain (3.3 percent), Qatar (2.7 percent), Oman (2.4 percent) and Kuwait (1.7 percent).

Previously, the International Monetary Fund (IMF) projected that the UAE’s GDP growth to increase to 5.1 percent in 2025 in its latest World Economic Outlook (WEO) Report.

The UAE is actively working on attracting foreign investment and diversifying its economy. Currently, non-oil GDP now accounts for more than 70 percent of the UAE’s total GDP. “The UAE’s ambitious structural reform agenda should continue to be supported by integrated government strategies, deliver strong governance frameworks, and promote private sector development and green growth,” the IMF said in a statement last May.

So far, the UAE has signed Comprehensive Economic Partnership Agreements (CEPAs) with 24 countries across five continents, of which 18 were officially signed and six have come into effect.

At the same time, the UAE economy has partnered with the world’s largest economies to massive foreign investments and strengthen its non-oil foreign trade. The number of new companies setting up their base in the UAE in 2024 surged to 200,000, with foreign direct investments (FDIs) expected to reach AED130 billion, up from AED111 billion in 2023. 

In a historic feat, the nation’s trade exceeded AED2.8 trillion during the first nine months of 2024. As the country solidifies its position as a global hub for investment and trade, the UAE is being regarded as one of the fastest-growing economies globally.

Abu Dhabi recently launched the world’s first Giga scale energy storage project to integrate solar power and battery storage to provide 24/7 renewable energy. As a key milestone for the UAE, the project is set to deliver 1GW of baseload power daily through a 19GWh battery energy storage system (BESS) and a 5.2GW solar photovoltaic (PV) plant. The project is expected to create 10,000 new jobs and boost the UAE’s economy with unprecedented innovations in renewable energy.