The UAE economy will grow five per cent this year and four per cent over the next two years, according to forecasts by Standard Chartered .

The global bank's growth forecast for this year is higher than the Central Bank of UAE's projection of 4.4 per cent for 2025, but less than 5.4 per cent predicted for the next year.

The lender projected that the inflation in the country would stay at three per cent for three consecutive years. According to the UAE Central Bank, inflation in the UAE was 1.1 per cent in March 2025, driven primarily by an increase in non-tradeable inflation.

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It projected a current account balance of seven per cent of GDP for 2025, increasing to eight per cent next year and 10 per cent in 2027.

Manpreet Gill, chief investment officer of Africa, Middle East and Europe, Standard Chartered, said the long-term view on the UAE and the Gulf region is being a growth bright spot.

“We continue to observe that geopolitical risks can lead to short-term sentiment jitters, but they do not appear to influence long-term trends in markets or investment flows. For this region, the impact was perhaps most visible in oil prices, which are now largely back to where they were before tensions erupted. The long-term focus remains very much on the region being a growth bright spot in a world where headline growth remains tepid in many regions,” Gill told Khaleej Times.

However, Standard Chartered projected that the oil oversupply remains the dominating theme.“We expect West Texas Intermediate (WTI) to trade in a range around $65 per barrel over the next 3-12 months. Geopolitical risks may result in temporary spikes in oil prices,” it said.

“A standalone demand-supply outlook continues to argue for an oversupplied oil market, which is behind our $65 a barrel forecast for WTI over 6-12 months. Geopolitics is a clear upside risk - while the extent of excess supply and Opec+ spare capacity can help offset this, near-term spikes in prices cannot be ruled out,” said Standard Chartered in its Global Market Outlook report.

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