WASHINGTON, December 4, 2025: The World Bank has projected that the United Arab Emirates’ economy will expand by 4.8 percent in 2025, driven by balanced growth across both oil and non-oil sectors. The forecast was released in the Gulf Economic Update (GEU) Fall 2025 report titled “The Gulf’s Digital Transformation: A Powerful Engine for Economic Diversification.” The report confirmed that the UAE continues to record broad-based growth supported by its diversified economic structure and resilience to global fluctuations.
Innovation and investment power the UAE’s economic expansion.It said that real GDP growth of 4.8 percent reflects the country’s success in developing a dynamic export base and advancing policies that enhance competitiveness and productivity. The World Bank forecast placed the UAE ahead of other Gulf Cooperation Council (GCC) economies in 2025. Saudi Arabia is expected to record growth of 3.8 percent, Bahrain 3.5 percent, Oman 3.1 percent, Qatar 2.8 percent, and Kuwait 2.7 percent. The report said that these figures reflect stable fiscal management and continued efforts to reduce reliance on hydrocarbons while expanding non-oil sectors such as technology, manufacturing, and logistics.
According to the World Bank, the UAE’s ongoing investments in innovation, renewable energy, and digital infrastructure continue to support the country’s robust economic performance. The report identified digital transformation as a central factor in accelerating productivity across industries, noting that all GCC economies now maintain advanced telecommunications systems with more than 90 percent 5G coverage and widespread access to affordable high-speed internet. The report found that large-scale investments in data centers, high-performance computing, and artificial intelligence are positioning the UAE and Saudi Arabia as regional leaders in digital readiness.
UAE growth forecast reflects strong non-oil performance
It noted that both countries have established strong ecosystems that encourage innovation and attract private sector investment. These developments, supported by well-developed regulatory frameworks and financing mechanisms, are strengthening the region’s competitiveness in global technology markets. Safaa El Tayeb El Kogali, the World Bank’s Division Director for the Gulf Cooperation Council, said that diversification and digital transformation have become essential to achieving sustainable economic stability. She stated that the rapid technological progress in the GCC reflects the effectiveness of national strategies focused on digital growth and human capital development.
El Kogali highlighted that strong digital infrastructure, growing computing capacity, and expanding skills in artificial intelligence contribute significantly to the Gulf’s economic resilience. The report also highlighted that women’s participation in science, technology, engineering, and mathematics (STEM) fields across the Gulf exceeds the global average. This advancement, it said, enhances the region’s competitiveness in the global digital economy and supports inclusive workforce development. The World Bank recommended continued efforts to promote workforce upskilling and expand training programs aimed at equipping employees with digital and AI-related competencies.
The UAE remains a model for economic diversification
In addition, the report called for greater support for small and medium-sized enterprises to adopt artificial intelligence and digital technologies to boost innovation and productivity. It said that expanding access to financing and technology infrastructure for SMEs would help accelerate diversification and further integrate non-oil sectors into national growth strategies. The Gulf Economic Update underscored that the progress achieved in digital transformation is now a major driver of economic diversification across the GCC. The World Bank said that with strong policy frameworks, significant investment in emerging technologies, and growing private sector participation, the Gulf economies are well-positioned to sustain steady growth and maintain economic stability in the years ahead.
It added that the region’s focus on digital innovation, renewable energy transition, and infrastructure modernization is reinforcing resilience against external shocks. Expanding cooperation among GCC members in trade, data exchange, and research is further supporting integration and competitiveness. The report noted that these coordinated efforts are enhancing the Gulf’s role as a global hub for technology, logistics, and sustainable finance, underpinning its long-term economic transformation. – By Content Syndication Services.