The UAE's GDP is set for significant growth by 2025
anticipated economic growth in the Middle East and North Africa in 2024 and 4.2% in 2025
projected growth for the UAE’s real GDP in 2024 and 2.8% in 2025
expected growth rate for the economies of oil-exporting countries in 2024 and 4.2% in 2025
Growth amidst geopolitical uncertainty
Most chief economists are optimistic about sustained global growth, with 80% expecting the global economy to either improve or stabilize this year as per the World Economic Forum’s Chief Economists Outlook. The report also highlights the increasingly complex landscape leaders are navigating. 97% of respondents anticipate geopolitics to contribute to global economic volatility. It is therefore crucial to set policies that will revive the global economy and lay the foundation for more inclusive, sustainable and resilient growth. Asian economies, particularly in South Asia and East Asia and Pacific, are also expected to grow moderately.
Additionally, the overall health of the global economy, monetary policy, financial and labour markets, geopolitics and domestic politics are all factors likely to affect corporate decision-making. According to 86% of chief economists, political and economic stress will be a growing challenge for decision-makers this year, and 79% expect increased complexity to impact decision-making.
High-income countries are expected to see growth driven by technological advancements, artificial intelligence and green transition, while low-income economies stand to benefit more from interventions in institutions, social services and access to finance. There is, however, a significant lack of agreement on how environmental and industrial policies affect growth.
Spotlight on the UAE and Saudi Arabia
The GCC region is expected to see economic growth rebound to 2.8% in 2024 and 4.7% in 2025, with the UAE and Saudi Arabia driving this recovery. This growth is largely attributed to the forecasted increase in oil production during the second half of 2024 and a global economic recovery, as projected by the World Bank. The region’s focus on diversifying its economies highlights its strategic approach to achieving resilience and sustainable development during global volatility.
The UAE is implementing various structural reforms and making strategic investments to diversify its economy and boost its industrial capabilities. Significant initiatives include Abu Dhabi's USD 10 billion investment in tourism infrastructure, ADNOC Gas's USD 13 billion plan to expand gas operations globally and locally over the next five years, and Dubai’s approval of a public-private partnership portfolio valued at USD 10.9 billion.
The fastest growing economy
In 2024 and 2025, the UAE is set to remain the fastest-growing economy in the GCC region due to its ability to increase oil production earlier than other OPEC+ nations. Growth in the Gulf is also expected to accelerate as oil output rises from October 2024, while non-oil sectors continue to expand.
Driven by its diversification efforts and strong trade relationships with neighboring countries, the UAE’s economy is forecasted to achieve 6.7% growth in 2025, a significant increase from 3.8% this year. The nation’s positive economic outlook is supported by its thriving tourism sector and continued economic expansion.
Dubai particularly saw a surge in international visitors, with 1.77 million in January and 1.9 million in February 2024. Additionally, hotel guest spending is projected to rise from USD 723.4 billion in 2023 to USD 758.61 billion in 2024, according to the Department of Economy and Tourism (DET).
Our latest CEO Outlook report highlights the UAE's remarkable economic resilience and growth potential, with strategic investments in diversification and industrial capabilities positioning the nation as a leading hub for sustainable development and business innovation."
A strategic and safe environment
The UAE ranked 10th in the world in the 2023 Soft Power Index. This is its highest-ever global ranking, marking its fourth consecutive year as the leading nation in the Middle East. The index evaluates a country’s ability to influence others through cultural appeal, diplomatic relations, education, business and trade, governance, and digital engagement.
Beyond its robust economic influence (hard power), the UAE fosters cultural exchange, tourism and global connectivity (soft power). Investments in aviation infrastructure by flagship airlines like Emirates and Etihad have extended the nation’s geopolitical reach to over 150 destinations worldwide.
The UAE also ranks highly in terms of safety and security, having low crime rates and an absence of domestic terrorism. Abu Dhabi topped Numbeo’s 2024 Safety Index as the world’s safest city, with Dubai ranking highly as well at fourth place. According to the 2024 Gitnux Marketdata Report, the UAE is recognized as the third safest country globally. Additionally, the UAE is a responsible global actor and continues to provide relief supplies to countries in need, including medical and foreign aid to various developmental, humanitarian and charitable projects.
In the 2024 World Competitiveness Report, the UAE went up three places to secure 7th place globally, surpassing nations like Norway, Iceland, Japan, Canada and Finland. Noteworthy achievements include ranking first globally in employment, internet usage and resolution of industrial disputes. The UAE also ranked second in government policy adaptability, tourism revenues and bureaucratic efficiency.
Top destination for millionaires
For the third consecutive year, the UAE is set to retain its status as the world’s leading destination for wealthy migrants with an estimated 6,700 individuals expected to relocate by the end of 2024, ahead of the US, Singapore and Canada. According to the Henley and Partners’ 2024 Private Wealth Migration Report, the influx of millionaires from the UK will significantly boost the UAE’s millionaire population, contributing to foreign exchange reserves.
These migrating millionaires, comprising approximately 20% entrepreneurs and company founders, can stimulate the local economy by opening new businesses and providing new employment opportunities.
In the UAE, 72% of CEOs are confident about their company’s growth prospects, with 88% expecting an annual growth rate of 2.5% or more in the next three years. This optimism is likely due to the country's stable economy, supportive business environment and the government’s focus on innovation and sustainability. Similarly, 80% of CEOs in the Middle East expect their businesses to grow by more than 2.5% over same period. 28% of UAE CEOs however are neutral, a higher percentage than the Middle East (19%), reflecting cautious optimism and an awareness of the potential risks impacting the region, including oil prices and global economic fluctuations.
Our findings indicate a notably optimistic market outlook in the UAE, where 96% of CEOs are confident about their industry’s growth compared to 79% in the Middle East. Additionally, only 4% of UAE CEOs are neutral, underscoring a strong overall positive sentiment.
52% see geopolitical complexities as a significant challenge, reflecting the ongoing regional tensions. Economic uncertainty is also a major concern for 60% of UAE CEOs, driven by global market fluctuations and regional instability. Notably, only 16% worry about their organization’s growth prospects, compared to 32% in the Middle East, suggesting that the UAE’s stable economic environment and supportive policies are reducing growth uncertainties.
Additionally, only 4% of CEOs in the UAE are concerned about protectionist attitudes, highlighting the country's open economic policies.
More than three quarters (76%) of local leaders are under pressure to ensure long-term business prosperity. This may be driven by increased competition, digital transformation efforts, the rapidly evolving business landscape and ambitious growth targets related to the UAE’s Vision 2030 and Centennial 2071. The UAE’s stable regulatory environment and ongoing government support, however, seem to alleviate some of these concerns, as 24% report feeling less pressure.
48% of CEOs in the UAE have a high mergers and acquisitions (M&A) appetite, compared to 28% in the Middle East. 28% are also prioritizing M&A strategies for achieving their organization's growth objectives, followed by organic growth (20%) and strategic alliances with third parties (20%). Conversely, 52% are planning to make acquisitions but with moderate impact on their organization, lower than the 65% of Middle Eastern CEOs with similar expectations. Unlike 7% of CEOs in the Middle East, none of the local CEOs are unlikely to make any acquisitions in the next three years.
12% of UAE CEOs also highlight joint ventures as an important growth strategy, versus only 4% in the Middle East and 6% globally.
Local CEOs view geopolitics and political uncertainty as the greatest threat to their organization’s growth over the next three years, aligning with 28% of CEOs in the Middle East. Cybersecurity is also a significant concern for CEOs in the UAE and the Middle East, at 16% and 12% respectively. Environment/climate-related risks were listed third in the UAE at 12 %, along with supply chain challenges and pricing pressures resulting from economic decoupling between countries.
Explore the series
World Bank predicts UAE's real GDP will rise to 4.1% in 2025 (wam.ae)
UAE economy to grow 3.9% in 2024, central bank projects | Banking – Gulf News
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Dubai’s World Government Summit to explore future of AI (thenationalnews.com)
Economic outlook is brightening: Chief Economists (zawya.com)
UAE, Saudi to lead GCC economic rebound - News | Khaleej Times
UAE to remain fastest growing economy in GCC in 2024 and 2025 (msn.com)
UAE’s economic growth will jump to 6.7% in 2025 – BMI (zawya.com)
Dubai welcomed 3.67m tourists in January-February as available hotel rooms hits 148,450 - Arabian Business
2024 Hotel Industry Outlook Forecasting Increased Occupancy, Revenue, and More | Fintech Alcohol Payments & Data
UAE’s soft power shines bright on the world stage | Op-eds – Gulf News
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UAE remains world’s leading millionaire magnet, attracting 6,700 wealthy migrants by 2024-end | Markets – Gulf News
UAE teams up with Cop29 and Cop30 hosts to keep crucial 1.5ºC target within reach (thenationalnews.com)
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UAE economy to grow 3.9% in 2024, central bank projects | Banking – Gulf News
UAE economy to grow 3.9% in 2024, central bank projects | Banking – Gulf News
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