The UAE economy is forecast to grow by 6.6% in 2027, reversing a projected 1.5% contraction in 2026, according to the latest Middle East economic outlook from ICAEW and Oxford Economics. The recovery is expected to form part of a broader improvement across the GCC as regional energy markets, trade and travel gradually normalize following significant disruption during 2026.
Original article: GCC economy set to contract in 2026, but will rebound strongly next year by Arabian Business.
Key Insights:
UAE Growth Forecast to Recover in 2027
The UAE is expected to return to stronger economic growth in 2027 following a challenging year for the wider region. While headline growth has been affected by regional disruption, Oxford Economics said non-oil momentum has held up better than the overall figures suggest, with PMI data and consumer confidence showing greater resilience.
Tourism is also beginning to recover gradually across the region, including in Dubai and Abu Dhabi. The return of more international airlines to regional airspace during 2027 is expected to support further improvement in travel and tourism activity.
Energy Sector Expected to Drive GCC Recovery
Across the GCC, the hydrocarbon sector is forecast to expand by 25.9% in 2027 after contracting by 26.9% in 2026, as oil markets gradually stabilize. Saudi Arabia is forecast to return to 4.7% growth next year following a projected 4.6% contraction in 2026, while Qatar is expected to record growth of 11.5%.
Energy is expected to be one of the main drivers of the region’s broader recovery, although the outlook remains dependent on an easing of the disruption that has affected regional energy production and exports during 2026.
Outlook for 2027
The UAE’s projected return to 6.6% growth in 2027 represents a significant improvement from the contraction forecast for this year. Resilient non-oil indicators, alongside an expected recovery in energy markets, trade and international travel, point to improving economic conditions as the region moves into 2027, with the pace of recovery continuing to depend on how regional conditions develop.
