The UAE economy growth 2025 started strong, expanding 3.9% year-on-year in Q1 to $123.8 billion (AED 455 billion). According to state news agency WAM, the rise was driven by a 5.3% increase in non-oil activities, which reached $95.8 billion (AED 352 billion).
Oil contributed 22.7% of GDP during the quarter, while non-oil sectors set a new record, accounting for 77.3% of real GDP. Minister of Economy and Tourism Abdullah bin Touq Al Marri praised the performance, citing resilience, investor confidence, and alignment with the We the Emirates 2031 vision. The long-term plan targets GDP of $816.7 billion (AED 3 trillion) within the next decade.
Sector Highlights
- Manufacturing: Grew 7.7%, the highest growth rate among all sectors.
- Finance and Insurance: Expanded 7%, reflecting strong credit and investment flows.
- Construction: Also grew 7%, supported by infrastructure and urban development projects.
- Real Estate: Recorded 6.6% growth, driven by continued demand in residential and commercial markets.
- Trade: Expanded 3%, but contributed the most to non-oil GDP at 15.6%.
Finance and insurance contributed 14.6%, while manufacturing accounted for 13.4%, underscoring the UAE’s diversified economic base.
Business Activity in August
The S&P Global UAE Purchasing Managers’ Index (PMI) rose to 53.3 in August, up from July’s 49-month low of 52.9. The PMI improvement reflected faster output growth, higher sales, and expanding project activity. Panellists noted that demand in local markets remained strong, fueling business optimism.
Outlook
With robust growth across manufacturing, finance, construction, and real estate, the UAE remains on track to achieve its economic diversification goals. The strong first-quarter results, coupled with improving business activity in Q3, reinforce confidence in the UAE’s ability to sustain momentum through 2025 and beyond.
