Non-Oil Growth Powers UAE’s Stronger-Than-Expected 2026 Outlook
While oil output growth is likely to remain modest, the bank expects this to be more than offset by sustained expansion across non-oil sectors.
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The UAE is entering 2026 with economic momentum that appears both durable and unusually broad-based, driven by strong non-oil growth, resilient trade flows, and a balance sheet that affords policymakers the flexibility to maneuver.
Standard Chartered’s forecasts indicate a roughly 5% GDP growth in 2026, a significant upgrade from the previous 4% estimate and well above global expectations. This projection comes after a strong 2025, during which nominal GDP is expected to have hit approximately $569 billion.
While oil output growth is likely to remain modest, the bank expects this to be more than offset by sustained expansion across non-oil sectors and by the UAE’s critical role in current global supply chains.
As trade routes recalibrate in response to geopolitical fragmentation and near-shoring, the UAE has positioned itself as a connective hub linking Asia, the Middle East, Europe, and Africa. Standard Chartered estimates that total foreign trade could approach the $1 trillion mark by 2026, with Asia alone accounting for close to one-third of volumes. This trade-driven impulse is reinforcing domestic activity rather than substituting for it.
Non-oil GDP is expected to grow by approximately 4.5% in 2026, driven by population inflows, favorable demographics, and sustained strength in property markets. Tourism, aviation, logistics, financial services, and real estate remain key driving factors, while investments in manufacturing and technology are adding depth and reducing reliance on a narrow set of sectors.
Other institutions broadly share this optimistic outlook. The Central Bank of the UAE has projected real GDP growth of around 5.3% in 2026, while both the International Monetary Fund and the World Bank expect growth of roughly 5% to extend into 2027. Among regional and private-sector forecasters, Emirates NBD predicts growth of approximately 4.5%, while the Institute of Chartered Accountants in England and Wales projects growth as high as 5.6%, driven largely by non-oil activity.
The foundation is strengthened by the UAE’s robust financial position. Twin fiscal and current account surpluses, deep domestic liquidity, and well-managed policy have kept balance sheets strong. Deposit growth continues to outpace credit expansion, leaving banks with ample capacity to support domestic investment and selective cross-border lending. Inflation, forecast at around 1.8% in 2026, further reinforces macroeconomic stability.
