The UAE is set to emerge among the strongest economic performers in the Gulf in 2026, achieving overall GDP growth of 4.3 per cent, according to the latest outlook released by the Mastercard Economics Institute (MEI).
The report also offers a bullish vision for the broader Gulf region — one built on accelerating diversification, digital transformation and sustained investment.
MEI’s projections place Mena growth at 3.6 per cent in 2026, outpacing the global forecast of 3.1 per cent. Against this backdrop, the UAE stands out, with MEI expecting GDP growth of 4.3 per cent and non-oil expansion close to 5 per cent. These figures reflect strong structural momentum: rising non-hydrocarbon activity, sustained public and private investment in infrastructure and technology, and widespread digital adoption across sectors.
MEI argues that the region’s pivot toward emerging-market trade, combined with rapid deployment of artificial-intelligence tools and fiscal expansion, will supply much of the fuel for growth. It also notes that small and medium-sized enterprises (SMEs) in the UAE — now responsible for just over 37 per cent of retail spending — are scaling up e-commerce and tech-enabled operations, reshaping both consumption and business dynamics.
While the MEI projection is compelling on its own, it aligns closely with forecasts from other major institutions that point to broad-based confidence in the UAE’s 2026 trajectory.
The Central Bank of the UAE (CBUAE), in its latest Quarterly Economic Review, projects real GDP growth between 5.3 and 5.4 per cent in 2026 — one of the most optimistic assessments. The central bank attributes this outlook to strong non-hydrocarbon performance and an anticipated rebound in hydrocarbon output, driven partly by adjustments to Opec+ production plans.
Independent observers echo this view. The International Monetary Fund (IMF), in its 2025 Article IV consultation, raised the UAE’s 2026 GDP forecast to 5.0 per cent, citing robust non-oil growth, expanding tourism and construction, and increasing hydrocarbon output. The World Bank offers a slightly more conservative but still positive estimate, projecting around 4.9 per cent growth for the UAE in 2026, supported by higher infrastructure investment, an expanding services sector and trade-driven gains.
Together, these projections suggest that 2026 could be one of the UAE’s strongest economic years in decades — even as the global economy transitions into a slower-growth environment.
With expectations converging around the 5 per cent mark, the structural drivers of the UAE’s expansion are clear. The non-oil economy — spanning tourism, real estate, logistics, technology and financial services — continues to accelerate, supported by long-term national strategies, regulatory reforms and substantial inflows of foreign direct investment. At the same time, renewed strength in hydrocarbon production provides a cyclic boost that complements, rather than overshadows, the country’s diversification gains.
Regionally, the UAE’s strong performance reinforces optimism across Gulf economies. MEI highlights similar investment-driven diversification movements across the GCC, where governments are directing significant capital toward renewables, advanced industries, infrastructure and technology — all aligned with long-term national visions.
Trade patterns across Mena are also evolving. The region is steadily increasing economic ties with emerging markets in Eastern Europe, Africa and Asia, reducing dependence on traditional Western partners and tapping into faster-growing economic blocs. MEI expects this shift to deepen through 2026, supporting export-oriented sectors and improving resilience to global volatility.
Digital transformation remains a central theme across the region. MEI points to the rapid adoption of artificial intelligence, cloud services, fintech and digital infrastructure as critical growth drivers. In the UAE, national strategies for AI and the digital economy are already reshaping government services, finance, logistics and retail — lifting productivity and opening new opportunities for high-value, tech-enabled firms. SMEs that embrace digital tools are positioned to grow fastest, gaining ground in sectors traditionally dominated by larger players.
For consumers, 2026 is likely to reinforce value-conscious and experience-driven spending patterns: more travel, entertainment and lifestyle services, supported by higher disposable incomes, stable inflation and stronger household confidence.
In summary, with forecasts from MEI, CBUAE, the IMF and the World Bank converging around 5 per cent GDP growth, the UAE appears set for a breakout year. According to economists, structural transformation is deepening, investment is accelerating, and both domestic and international businesses are preparing to scale. “All signs point to 2026 becoming a pivotal year in the UAE’s advance toward diversified, sustainable long-term growth.”
