Economic Growth in UAE remains Robust Despite Worldwide Economic Instability, reports HSBC
📢 Here's an updated take on the economic outlook for the Gulf Cooperation Council (GCC) region, focusing particularly on the UAE in 2025:
practitioner of economics, Simon Williams, foresees a resilient economic landscape for the UAE next year, even amidst global turbulence. Kicking off 2025 with a strong economic pulse, the UAE's economic engine is fueled by increased consumption and investment. Williams projects the non-oil GDP to surge by 3.5 to 4 percent in both 2025 and 2026, showcasing a commendable growth performance compared to global standards.
In the context of global trade tensions and tariffs, Williams acknowledges the disruption these factors have caused worldwide. However, the UAE's foreign direct investment (FDI) isn't faltering, accounting for 4 to 5 percent of GDP in recent times—a respectable figure on the global stage.
During the three-day MENA Capital Markets Summit, HSBC UAE inaugurated a joint report with Dubai Financial Market (DFM) describing Dubai's ambition to rise among the top four financial hubs globally by 2033. This strategic aspiration is rooted in Dubai's capital markets performance, which outpaced the MSCI Emerging Markets Index from 2016 to 2024, delivering annual returns of 4.9 percent, with foreign investors drawing half of the market activity.
Dubai's allure as a global financial center is further reinforced by its sway in global IPO activity and the rising presence of wealth and asset managers in the Dubai International Financial Centre.
Key insights:- Sector-wise, the UAE is expected to see continuous growth in non-oil sectors such as tourism, transportation, financial services, construction, real estate, and communications[1]. Another report suggests real GDP growth of 4.7% in 2025 and 5.7% in 2026, underscoring the combined strength of both non-hydrocarbon and hydrocarbon sectors[3].- Pertaining to regional comparison, the UAE's non-oil sector growth is more robust than other regions, contributing significantly to the country's overall economic resilience and diversification efforts. The regional GDP for the GCC is projected to expand at 3.1% in 2026[4].- Key growth drivers for the UAE include diversification efforts focused on sectors like tourism, construction, and financial services, government support through infrastructure and economic resources, and regional context of investing in AI and data infrastructure in response to global economic challenges[1][3][4].
News Source: Emirates News Agency [Source]
In light of the UAE's strategic diversification efforts, there is a potential for increased collaboration in sectors such as tourism, construction, and financial services, considered key drivers for economic growth, particularly in 2025. This collaborative approach, coupled with government investments in infrastructure and economic resources, could attract more foreign investment (FDI), further bolstering the UAE's position in global finance.
