UAE GDP growth is expected to accelerate sharply in 2027, with the Central Bank of the UAE (CBUAE) raising its forecast for real economic growth to 10.4 per cent from its previous estimate of 9.8 per cent.
The upward revision of 0.6 percentage points reflects expectations of stronger hydrocarbon production alongside continued expansion across the UAE’s non-oil economy.
The revised forecast was included in the CBUAE’s latest Quarterly Economic Review, which said the UAE economy is expected to maintain positive growth momentum over the medium term.
The central bank expects growth to strengthen significantly next year as production conditions normalise and the UAE moves towards its target of producing five million barrels of oil per day.
“The UAE economy is expected to maintain positive growth momentum over the medium term,” the CBUAE said in its latest assessment.
Following solid economic growth in 2024 and 2025, the central bank expects economic activity to continue expanding in 2026 before accelerating in 2027.
For 2026, the CBUAE projects overall real GDP growth of 1.6 per cent. Hydrocarbon-sector activity is expected to expand by 2.4 per cent during the year.
The growth profile is expected to change considerably in 2027, with hydrocarbon activity projected to increase by 26.8 per cent as oil production rises towards five million barrels per day.
The central bank said the outlook reflects an expected normalisation of production conditions, although developments in the external environment remain a potential source of uncertainty.
Oil production emerges as key growth driver
Higher oil production is expected to be one of the most significant factors behind the UAE’s revised 2027 growth outlook.
The UAE has been increasing its oil production capacity following its exit from Opec earlier this year. The country has set a target of reaching five million barrels per day of production.
According to the CBUAE, the expected increase in hydrocarbon activity will provide a substantial boost to overall GDP growth next year.
Since the UAE’s departure from Opec, its oil production capacity has increased from around 3.41 million barrels per day, the official quota previously set by the organisation, to approximately 4.85 million barrels per day.
The planned increase towards five million barrels per day is expected to strengthen the contribution of the oil sector to economic growth and could also improve government fiscal revenues.
S&P Global has also projected that UAE oil production will gradually increase over the coming years as Abu Dhabi National Oil Company (Adnoc) works towards its five-million-barrel-per-day target.
The increase in production comes at a time when the UAE continues to pursue its broader strategy of combining hydrocarbon revenues with diversification across non-oil sectors.
Non-oil economy remains important
Although the oil sector is expected to provide a major contribution to the sharp acceleration in GDP growth in 2027, the CBUAE also highlighted the continued resilience of the UAE’s non-hydrocarbon economy.
After recording non-oil GDP growth of 6.8 per cent in 2025, the central bank expects non-oil economic activity to expand by 1.3 per cent in 2026 and 4.9 per cent in 2027.
The forecast reflects continued contributions from a broad range of non-hydrocarbon sectors.
The UAE has spent years developing its non-oil economy, with sectors such as tourism, hospitality, real estate, financial services, logistics, trade, manufacturing and technology playing an increasingly important role in overall economic activity.
The latest outlook suggests that these sectors are expected to continue contributing to growth even as the hydrocarbon sector expands.
The combination of higher oil production and continued non-oil activity is therefore expected to provide a broader base for the UAE’s economic expansion.
Fiscal buffers provide support
The CBUAE also pointed to the UAE’s strong fiscal position as an important factor supporting the economic outlook.
The country entered 2026 with substantial fiscal buffers, including relatively low public debt and significant sovereign assets.
These financial buffers provide the government with additional capacity to support economic activity when required and maintain investment during periods of uncertainty.
The central bank said these fundamentals provide scope to support the economy as needed.
Government measures are also expected to contribute to economic activity during the forecast period.
Among the measures highlighted by the CBUAE are the Financial Resilience Package introduced by the central bank, Dubai’s Dh2.5 billion support initiative and infrastructure-related public expenditure.
According to the central bank, these measures are expected to support economic activity and help maintain favourable conditions for businesses and investment.
Together with the UAE’s broader macroeconomic fundamentals, the measures are expected to support economic growth over the forecast horizon.
Economic outlook follows regional uncertainty
The revised forecast comes after a period of increased geopolitical and economic uncertainty across the Middle East.
The UAE’s economic outlook had been affected by regional developments and concerns surrounding the impact of the conflict that began on February 28.
However, the latest assessment suggests that activity in the UAE’s non-oil sectors is continuing to recover as business confidence improves and concerns over the regional situation ease.
UAE Minister of Economy and Tourism Abdulla Bin Touq Al Marri recently said the country could experience a significant economic rebound next year.
Speaking at the Future Hospitality Summit World at Madinat Jumeirah, Al Marri described 2027 as a potential “counter-attack year” following slower economic growth amid the regional conflict.
He said the UAE would return strongly and anticipated a significant rebound in economic activity.
His comments came as the country’s tourism and hospitality sectors continued to remain important components of the non-oil economy.
The hospitality industry is particularly significant for the UAE because of its links with tourism, aviation, retail, real estate and other services.
Oil and diversification working together
The CBUAE’s latest forecast highlights the dual structure of the UAE economy.
On one side, higher hydrocarbon production is expected to deliver a substantial increase in oil-sector activity. On the other, continued investment and activity across non-oil industries are expected to provide additional support.
This combination remains central to the UAE’s medium-term economic strategy.
The country continues to invest in sectors designed to reduce its dependence on hydrocarbons, while maintaining oil and gas production as an important source of national income.
The expansion of non-oil activity is also helping the UAE attract foreign investment and develop new sources of economic growth.
Financial services, tourism, logistics, technology, infrastructure and real estate have become increasingly important components of the country’s economic landscape.
The latest CBUAE projections suggest that the non-oil economy will continue to expand even as hydrocarbon production rises.
What the 10.4% forecast means
The revised 10.4 per cent forecast represents a substantial acceleration compared with the CBUAE’s 2026 growth projection of 1.6 per cent.
Much of this difference is linked to the expected increase in hydrocarbon production.
The projected 26.8 per cent expansion in hydrocarbon activity in 2027 is therefore a major component of the overall GDP forecast.
At the same time, the expected 4.9 per cent expansion in non-oil GDP demonstrates that economic diversification remains an important contributor to the UAE’s medium-term outlook.
The central bank has stressed that the forecast remains subject to developments in the external environment.
Global oil demand, energy prices, international trade conditions, geopolitical developments and broader global economic trends could all influence the UAE’s actual growth performance.
Higher production could strengthen government revenues and economic activity, while weaker global demand or lower energy prices could affect the contribution of the hydrocarbon sector.
Investment and business confidence
The UAE’s fiscal strength and infrastructure spending are also expected to support private-sector activity.
Infrastructure investment can stimulate demand across construction, engineering, logistics and related industries, while government support measures can help maintain favourable financing and operating conditions for businesses.
Dubai’s Dh2.5 billion support initiative is one of the measures identified by the CBUAE as supporting economic activity.
The central bank’s Financial Resilience Package is also expected to contribute to economic stability.
The combination of government spending, financial-sector resilience and sovereign assets gives the UAE additional capacity to respond to economic challenges while continuing to invest in long-term development.
Medium-term outlook
The CBUAE’s revised forecast indicates that the UAE expects economic growth to remain positive over the medium term.
The outlook is based on both an increase in hydrocarbon production and continued contributions from non-oil sectors.
The five-million-barrel-per-day oil production target is expected to be a key driver of the 2027 acceleration, while tourism, trade, finance, real estate, infrastructure and other non-hydrocarbon industries are expected to support broader economic activity.
The central bank’s forecast also highlights the importance of maintaining the UAE’s fiscal and financial buffers.
As the global economy continues to face uncertainty, these buffers could provide additional room for government support and investment.
The revised forecast puts the UAE’s expected 2027 GDP growth at 10.4 per cent, up from the previous 9.8 per cent estimate.
With oil production moving towards five million barrels per day and non-oil activity expected to remain resilient, the CBUAE sees a significant strengthening of economic growth next year.
The outlook nevertheless remains dependent on external conditions, particularly developments affecting energy markets and the wider regional economy.
For now, the combination of higher hydrocarbon production, continued non-oil expansion, strong fiscal buffers and government support measures forms the basis of the UAE’s upgraded economic outlook for 2027.
