UAE Economy to Maintain Momentum: Central Bank Projects 5.6% GDP Growth for 2026

The Central Bank of the UAE (CBUAE) has released its latest projections, indicating that the UAE’s real GDP is set for a significant expansion of 5.6% in 2026. This follows an equally robust performance in 2025, signaling a period of sustained economic momentum for the nation.

Here is a breakdown of the key drivers and figures from the latest economic report:

Consistent High-Level Growth

The CBUAE’s March 2026 report highlights the UAE’s resilience in the face of global economic fluctuations and regional tensions. After recording an estimated 5.6% growth in 2025, the economy is expected to maintain this pace through 2026. This performance consistently outperforms both regional and global averages.

Non-Oil Sector: The Growth Engine

The diversification of the UAE economy continues to pay dividends. The non-hydrocarbon sector remains the primary driver of prosperity:

  • Key Sectors: Growth is being spearheaded by financial and insurance services, manufacturing, and a booming construction sector.

  • Real Estate: The residential market saw “solid performance” throughout the previous year, with Abu Dhabi and Dubai experiencing high transaction volumes driven by population growth and sustained international investor interest.

  • Tourism & Aviation: In the first half of 2025 alone, Dubai welcomed nearly 10 million international visitors, a trend that has bolstered the aviation and hospitality industries into 2026.

Oil Sector Recovery

While the non-oil sector leads, the hydrocarbon sector is also poised for a strong contribution. As OPEC+ production quotas are adjusted, the UAE is expected to see a rise in oil output, supporting the overall headline GDP figure.

Inflation and Monetary Policy

  • Controlled Inflation: The CBUAE projects headline inflation to remain moderate at 1.8% for 2026, slightly up from the 1.3% average seen in 2025. This stability is attributed to declining transport costs and favorable food price developments.

  • Interest Rates: In line with global trends and the U.S. Federal Reserve, the Central Bank lowered its Base Rate to 3.65% at the end of 2025 and has maintained that level into early 2026 to support continued credit growth.

Financial Stability

The UAE banking sector remains a pillar of strength:

  • Assets & Loans: Total banking assets rose by over 17% annually to reach AED 5.34 trillion by the start of 2026.

  • Capital Strength: Banks are well-capitalized with a capital adequacy ratio of 17.1%, while asset quality improved with a non-performing loan (NPL) ratio of just 1.6%.

Medium-Term Outlook

The Central Bank remains optimistic, noting that the medium-term prospects are “broadly balanced.” This positive outlook is underpinned by the continued adoption of Artificial Intelligence (AI) to raise productivity and a generally supportive global financial environment.

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