World Bank report forecasts UAE economy to grow by 4.8%

The latest edition of the Gulf Economic Update (GEU)- Fall 2025, issued today by the World Bank, forecasts that the UAE economy will grow by 4.8 per cent.

The report, titled "The Gulf’s Digital Transformation: A Powerful Engine for Economic Diversification," confirmed that the UAE continues to achieve strong and broad-based growth, with balance across oil and non-oil sectors.

Real GDP is expected to grow by 4.8 per cent in 2025, and the country is a leader in diversifying its export base.

The report also projected economic growth of 3.8 per cent for Saudi Arabia, 3.5 per cent for Bahrain, 3.1 percent for Oman, 2.8 per cent for Qatar, and 2.7 per cent for Kuwait.

The report highlights three main pillars: the evolution of economic diversification indicators over the past decade, tracking macroeconomic developments, and focusing on digital transformation.

The report examined the results of economic diversification efforts in GCC countries over the past decade, indicating moderate progress, with some promising indicators emerging in recent years.

It also highlighted the rapid digital transformation in the Gulf and the acceleration of artificial intelligence adoption, noting that all GCC countries boast advanced telecommunications networks, with more than 90 per cent 5G coverage and affordable high-speed internet.

Large investments in data centres and high-performance computing are strengthening AI readiness, with the UAE and Saudi Arabia emerging as leaders regionally and internationally.

This progress is supported by enabling ecosystems, including facilities and financing for projects and innovation, as well as government adoption of generative AI applications.

Safaa El Tayeb El Kogali, World Bank Division Director for the Gulf Cooperation Council, said that diversification and digital transformation are no longer a luxury, but a necessity for achieving long-term economic stability and prosperity.

She added that the digital leap achieved by GCC countries is remarkable, noting that strong infrastructure, growing computing power, and increasing AI-related skills and competencies enhance the region’s position for leadership and innovation, provided environmental and labour-market challenges are addressed proactively.

The report also indicated that women’s participation in STEM fields in the Gulf exceeds the global average, enhancing the region’s digital competitiveness.

It recommended supporting small and medium-sized enterprises (SMEs) in adopting AI to enhance innovation, and implementing training programmes to upskill the workforce and mitigate labour-market gaps, in order to maximise the benefits of diversification and digital transformation.

WAM