UAE defies oil headwinds: The blueprint for global economic resilience
While crude oil prices hover near $60 per barrel, the lowest mark since 2020, and OPEC+ adjusts production levels, a remarkable success story is unfolding in the Gulf. The United Arab Emirates (UAE) is not just surviving the oil slump—it is using it as a launchpad for unprecedented economic expansion.
The UAE is emerging as the standout performer in the region, showcasing a powerful blueprint for sustainable growth that reinforces its position as a dominant global business and trade hub.
The Resilience Revelation
The UAE’s diversified economy is proving remarkably resilient, significantly outpacing regional peers. The International Monetary Fund (IMF) highlighted this strength in October 2025, noting the country “has shown strong resilience to global uncertainty, regional tensions, and oil price fluctuations.”
The forecast is telling: the IMF projects the UAE’s GDP to grow by about 4.8 per cent in 2025 and a solid 5.0 per cent in 2026.
This strong performance is no accident. It is the direct result of the government’s decade-long diversification agenda, which is fundamentally reshaping the economy.
Non-Oil Dominance: Non-oil sectors now contribute over 73 per cent of GDP, fueled by surging activity in tourism, logistics, manufacturing, and the digital economy.
Trade Surge: Non-oil trade rocketed past Dh2.8 trillion ($762 billion) in 2024, marking a 13.6 per cent year-on-year rise.
Fiscal Strength: The UAE continues to post fiscal and external surpluses, providing “ample buffers that can be deployed to respond to adverse shocks.”
This fiscal strength offers a stark contrast to some neighbours. PwC Middle East projects Saudi Arabia and Bahrain to run fiscal deficits of –3.7 per cent and –9.9 per cent of GDP, respectively, in 2026.
As Stephen Anderson, chief strategy & technology officer at PwC Middle East, observed: “The UAE, in particular, is redefining its role—from an energy supplier to a global leader shaping the next phase of trade and investment.”
A Region in Motion
The diversification drive is clearly paying off across the entire GCC, which is projected for overall growth of 3.9 per cent in 2025 and 4.4 per cent in 2026.
Saudi Arabia’s Vision: The Kingdom’s economy, the largest in the GCC, saw its non-oil sector grow 4.2 per cent in the first half of 2025, anchored by ambitious projects like Neom and the Riyadh Metro. The IMF expects Saudi GDP to expand by around 3.5 per cent in 2025.
Qatar’s LNG Power: Non-oil GDP expanded 5.3 per cent in the first half of 2025, boosted by post-World Cup tourism and finance. Continued LNG expansion will further cement its long-term energy advantage, with the IMF projecting real GDP growth of around 4 per cent next year.
Abu Dhabi led the non-oil growth charge, posting an impressive 6.4 per cent in the first half of 2025, underscoring how new industries are now the true engine of regional expansion.
Redefining Global Trade
Trade is the UAE's secret weapon. It is spearheading the GCC’s global strategy through a wave of Comprehensive Economic Partnership Agreements (CEPAs) and Free Trade Agreements (FTAs).
In 2024, UAE non-oil trade soared nearly 15 per cent to about Dh3 trillion ($817 billion). This activity reinforces the UAE’s critical role as the central hub connecting Asia, Africa, and Europe.
Richard Boxshall, PwC’s Chief Economist, put it simply: “Fiscal resilience today means adaptability. Lower oil prices are testing buffers but reinforcing the region’s commitment to reform.”
The message is unmistakable: while oil revenue remains important, non-oil activity is the real engine of growth. The UAE is demonstrating that a post-oil economy is not a distant aspiration, but a powerful, present-day reality.