UAE Economy Set to Grow 4.8% in 2025

The World Bank has released its GEU (Gulf Economic Update) for Fall 2025, and the outlook for the UAE is strong. The report forecasts 4.8% economic growth this year, placing the UAE ahead of its GCC (Gulf Cooperation Council) neighbours.

For business owners in the region, these numbers are important, and they show continued opportunity and a stable environment for investment.

Growth Across Multiple Industries

The report confirms that the UAE is achieving balanced growth across both oil and non-oil sectors. It means the economy is not overly dependent on a single revenue stream, which reduces risk for businesses operating here.

The UAE also leads the region in export diversification. For companies involved in trade, manufacturing, or services, this broader export base creates more pathways to growth.

How the UAE Compares Regionally

The World Bank also issued growth forecasts for other GCC economies:

Saudi Arabia is expected to grow by 3.8%, Bahrain by 3.5%, Oman by 3.1%, Qatar by 2.8%, and Kuwait by 2.7%.

The UAE’s 4.8% projection is the highest in the group, reflecting the strength of its diversification efforts over the past decade.

Digital Transformation and AI Readiness

The report, titled “The Gulf’s Digital Transformation: A Powerful Engine for Economic Diversification”, highlights how digital infrastructure is driving economic change in the region.

All GCC countries now have advanced telecommunications networks, with over 90% 5G coverage and affordable high-speed internet access. The UAE and Saudi Arabia are emerging as regional and global leaders in AI (Artificial Intelligence) readiness, supported by significant investments in data centres and high-performance computing.

For businesses, this means better tools, faster connectivity, and a growing talent pool with relevant technical skills.

Skilled Workforce and SME Development

One notable finding: women’s participation in STEM (Science, Technology, Engineering, and Mathematics) fields in the Gulf exceeds the global average. This contributes to the region’s digital competitiveness and expands the available talent pool.

The World Bank recommends that governments continue supporting SMEs (Small and Medium-sized Enterprises) in adopting AI technologies. It also calls for training programmes to address workforce gaps and ensure that businesses of all sizes can benefit from digital tools.