UAE’s GDP to grow by 5 percent in 2025

The UAE’s GDP is projected to grow by 5% in 2025, primarily driven by non-oil sectors, infrastructure investments, and economic diversification in line with the UAE Centennial 2071 vision, said the Economic Outlook 2025 report from the Mastercard Economics Institute (MEI), indicating that the global economy will continue to adapt and expand in 2025.

According to nukta.com, the report outlines key themes influencing the economic landscape, including shifts in monetary and fiscal policies as well as changing consumer behaviours, providing an in-depth overview of global and regional trends.

The UAE is expected to outperform the global average GDP growth of 3.2%, with a robust 5% increase year-over-year. Consumer spending in the UAE is anticipated to rise by 4.3%, while inflation is projected to stabilise at 2.3%.

The strong economic performance of the UAE is attributed to vibrant non-oil activities, reflecting the country’s long-term strategy under the UAE Centennial 2071 plan. Economic diversification continues to be a fundamental aspect of the nation’s development, supported by government-led infrastructure investments and a stable financial foundation.

The private sector is predicted to gain traction, aided by lower interest rates that foster employment and domestic consumption. Furthermore, population growth, particularly from net migration, plays a crucial role. Tourism remains a significant growth catalyst, with the UAE and GCC positioning themselves as rapidly growing global destinations, supported by ambitious initiatives to create world-class tourism experiences.

The report also emphasised on the evolving consumer preferences in light of rising costs. For example, travellers are increasingly choosing “travel twins”—alternative destinations that provide similar experiences to popular tourist spots but at lower prices. For UAE travellers, Lombok has emerged as a cost-effective choice compared to Bali, offering stunning natural beauty and fewer crowds.

Additionally, women’s participation in the workforce has increased, with their representation in the UAE reaching 55.4%. The rise of remote work has been particularly advantageous, providing greater flexibility for women as they balance professional responsibilities and caregiving roles.