UAE growth accelerates on non-oil strength

UAE real gross domestic product expanded 6.2 per cent in 2025 to AED1.9 trillion, underscoring the country’s strongest evidence yet that diversification is becoming the central driver of national output rather than a supporting pillar.

The Federal Competitiveness and Statistics Centre said non-oil GDP rose 6.8 per cent to AED1.5 trillion, outpacing headline growth and reinforcing the shift towards trade, finance, construction, manufacturing, real estate, logistics, tourism and digital industries. The figures place the UAE’s economy on a firmer footing as it pursues the “We the UAE 2031” agenda, which seeks to lift national GDP to AED3 trillion over the next decade.

Abdulla Bin Touq Al Marri, Minister of Economy and Tourism, said the national economy continued to deliver “outstanding and exceptional performance” under the leadership of President Sheikh Mohamed bin Zayed Al Nahyan and the directives of Sheikh Mohammed bin Rashid Al Maktoum, Vice President, Prime Minister and Ruler of Dubai. He said the results reflected the effectiveness of a diversified and sustainable economic model supported by non-oil expansion and the rising role of new economy industries.

Construction recorded the fastest sectoral growth in 2025, rising 11.1 per cent, as infrastructure projects, housing demand, commercial development and tourism-linked assets continued to support activity across the Emirates. Financial and insurance activities followed with growth of 10.4 per cent, reflecting deeper capital markets, stronger banking activity, wealth management flows and demand for business services.

Real estate expanded 7.9 per cent, supported by investor demand, population growth and sustained activity in Dubai and Abu Dhabi. Transport and storage grew 7.8 per cent, helped by aviation, ports, logistics and re-export activity, all of which remain central to the UAE’s position as a trade and travel hub linking Asia, Africa, Europe and the wider Middle East.

Trade retained the largest share of non-oil GDP at 16.9 per cent, confirming its role as the broadest contributor to the diversified economy. Financial and insurance activities accounted for 13.2 per cent, construction contributed 12.9 per cent, and manufacturing industries represented 12.8 per cent. The spread of contributions points to a more balanced production base, reducing dependence on hydrocarbons even as oil and gas remain important to fiscal strength, investment capacity and external balances.

Hanan Mansour Ahli, Managing Director of the Federal Competitiveness and Statistics Centre, said the 2025 results reflected the success of development and economic policies in strengthening stability and competitiveness across key sectors. She said investment in the digital economy, technology and innovation was helping build a more integrated ecosystem for long-term growth and reinforcing the UAE’s position as a global centre for business and investment.

The 2025 performance exceeded earlier expectations framed during the year, when growth forecasts had pointed to a strong but more moderate expansion. Higher oil output provided support, but the scale of non-oil activity shows that private-sector momentum, investment spending and structural reforms made a decisive contribution. Business licensing reforms, 100 per cent foreign ownership rules in many sectors, residency changes, free-zone expansion and corporate tax clarity have helped sustain investor interest despite wider geopolitical uncertainty.

Dubai’s economy provided one of the clearest signals of non-oil momentum during 2025, with trade, tourism, transport, financial services and real estate continuing to expand. The emirate’s visitor numbers, aviation capacity and hospitality investment supported consumption and services activity, while its property market remained a magnet for international capital. Abu Dhabi also advanced its diversification strategy through manufacturing, clean energy, artificial intelligence, financial services and industrial investment, backed by sovereign capital and long-term development plans.

The figures also highlight policy challenges. Rapid growth in construction and real estate can deepen pressure on housing affordability, infrastructure capacity and business costs. Strong population inflows support demand but require continued investment in transport, utilities, schools and healthcare. Higher non-oil output also increases the importance of productivity, skilled labour, technology adoption and regulatory consistency if growth is to remain sustainable.

External risks remain part of the outlook. Oil price volatility, shipping disruptions, regional tensions, global interest-rate movements and slower demand in major trading partners could affect trade flows and investment sentiment. The UAE’s open economy benefits from global connectivity, but that same openness leaves parts of the economy exposed to swings in capital, tourism and logistics conditions.