The World Bank has recently increased its economic growth forecast for the UAE to 4.6% in 2025, the highest rate in the Gulf region. This announcement was made during discussions on new economic insights for the Middle East and North Africa at the Spring Meetings in Washington. Additionally, the bank estimates that the economy could grow further to 4.9% in 2026, marking a significant uptick from its January 2025 prediction of 4% growth for 2025, which had anticipated a slightly lower rate of 4.1% for 2026.

Gulf Cooperation Council (GCC) Countries

The bank's report also includes growth projections for neighboring Gulf countries. Saudi Arabia is expected to experience a growth rate of 2.8% in 2025, rising to 4.5% in 2026. In Kuwait, growth is forecasted at 2.2% for 2025, improving to 2.7% in 2026. Meanwhile, Bahrain 's economy is predicted to grow by 3.5% in 2025, though this may decrease to 3% in 2026. Qatar is projected to see growth of 2.4% in 2025, with a substantial rise to 5.4% in the following year. Additionally, Oman is expected to witness a growth rate of 3% in 2025, increasing to 3.7% in 2026.

According to the report, the GCC region has managed to improve its growth from just 0.4% in 2023 to an anticipated 1.9% in 2024. This rebound follows a sharp decline in oil prices and production that severely constrained growth in 2023. The modest growth in 2024 has been largely supported by non-oil sectors within both Saudi Arabia and the UAE.

The report further projects the real GDP of the GCC economies to grow by 4.5% in 2026, alongside a 2.4% growth rate for developing oil-exporting countries and 3.7% for developing oil-importing nations. The overall growth in the Middle East and North Africa is estimated to be a modest 1.9% for 2024, with expectations for a slight increase to 2.6% in 2025 and 3.7% in 2026 amidst ongoing uncertainties in the global environment.

The World Bank noted that despite downward pressures on oil prices, countries such as Algeria , Iraq, Kuwait, Oman, Saudi Arabia, and the UAE are likely to benefit from a gradual increase in oil production planned by OPEC+ between April 2025 and September 2026.

Diversification Efforts

The report highlights that each country's unique developments will shape its distinct growth trajectory among oil-exporting nations. Furthermore, ongoing efforts to diversify economies will continue to expand non-oil sectors, particularly in Oman, Qatar, Saudi Arabia, and the UAE.

World Bank Upgrades UAE Economic Growth Forecast to 4.6% for 2025

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