Abu Dhabi is expected to lead the UAE’s economic surge with 5.6 per cent growth
ABU DHABI: The UAE is set to drive GCC economic growth in 2025, with its real GDP projected to expand by 5.2 per cent, supported by a 6 per cent growth in the non-oil sector and a 2.5 per cent recovery in the oil economy as OPEC+ supply restrictions ease in the second half of the year, according to BMI, a unit of Fitch Solutions.
Abu Dhabi is expected to lead the UAE’s economic surge with 5.6 per cent growth, while Dubai is forecast to grow by 3.5 per cent.
The broader GCC region is anticipated to see real GDP growth rise to 4.3 per cent in 2025, up from 1.8 per cent in 2024. Saudi Arabia will follow closely behind the UAE, with projected growth of 4.7 per cent, driven by economic diversification, trade ties with China and India, and investments in key sectors like aerospace, manufacturing, and technology.
Levant conflict
BMI’s analysis also factors in the expected resolution of the ongoing Levant conflict by the first half of 2025, which could bolster regional stability and economic recovery.
US President-elect Donald Trump’s focus on expanding the Abraham Accords is seen as a pivotal factor in efforts to end the Israel-Hamas war, alongside the potential to build on the recent ceasefire in Lebanon.
While BMI’s base case assumes a 75 per cent likelihood that the conflict will persist with contained regional instability until mid-2025, other scenarios include a 20 per cent chance of an earlier resolution and a 5 per cent risk of a wider conflict involving Iran, Israel, and the US.
Saudi project
In Saudi Arabia, giga-project activity will play a significant role in its economic performance, although BMI analysts caution that not all projects may achieve their ambitious targets.
The reallocation of assets by the Public Investment Fund, shifting focus from international to domestic investments, could contribute an additional 8% of GDP worth of capital towards domestic growth, further supporting Saudi Vision 2030 goals.
As the region stabilizes and economies rebound, the UAE’s robust growth outlook underscores its pivotal role in driving GCC economic progress.
