Economic growth in the UAE is projected to remain strong, with a forecasted expansion of 5.1 per cent in 2025, up from 3.8 per cent in the previous year as per the latest Q2 economic update by the Institute of Chartered Accountants in England and Wales (ICAEW). The forecast, developed in collaboration with Oxford Economics, emphasizes a robust recovery in oil production alongside a resilient non-oil sector momentum, driven by international trade, tourism, and advanced technology.
The institute anticipates UAE oil production to reach an average of 3.8 million barrels per day (bpd) by 2027, in alignment with efforts to increase capacity to 5 million bpd. This surge in supply is expected to maximize returns before a global shift away from fossil fuels, providing a steady revenue stream to support overall GDP growth.
Non-oil GDP growth remains steady, supported by strong purchasing managers’ index (PMI) readings and a significant increase in international trade. With the UAE pursuing 27 Comprehensive Economic Partnership Agreements (CEPAs), foreign trade exceeded Dhs3 trillion for the first time in 2024.
Tourism continues to play a vital role in driving growth, with international visitor spending projected to reach Dhs267.5 billion in 2025, contributing nearly 13 percent to GDP. Dubai witnessed a 3 percent year-on-year increase in international visitors, totaling 5.3 million in Q1 2025.
ICAEW also highlighted the launch of the “US-UAE AI Acceleration” framework as a key opportunity for technology investment and knowledge exchange, aiming to enhance bilateral cooperation between the two countries. Inflation in the UAE is expected to average 2.5 percent in 2025, with housing and recreation costs in Dubai being the primary contributors.
In a parallel development, Saudi Arabia’s economy is witnessing a resurgence, with GDP growth forecasted at 5.2 percent in 2025, a significant rise from 1.3 percent in the previous year. The growth is driven by increased oil output and robust domestic demand, with oil production expected to average 9.7 million bpd this year.
Non-oil industries in Saudi Arabia, particularly construction, trade, and the digital economy, are expanding under Vision 2030, contributing to a projected non-oil growth of 5.3 percent this year, supported by job creation and private sector activity.
Across the GCC region, economies are projected to grow by 4.4 percent in 2025, while Middle East GDP is expected to expand by 3.5 percent, demonstrating resilience despite tariffs. Investments in tourism, technology, and infrastructure are paying dividends, enhancing resilience and paving the way for long-term growth.
Despite the introduction of a 10 percent tariff on GCC goods by the US, the impact on the region is expected to be limited, as energy exports are exempt and only a small percentage of GCC exports are directed to the US. The report by ICAEW anticipates stronger growth in the Middle East in 2025, supported by OPEC+ oil supply increases and the resilience of sectors like tourism, real estate, and capital markets.