IMF Sees UAE Economy Set For Strong Rebound In 2027, Projects 7.7% Growth
The IMF projects the UAE's real gross domestic product (GDP) will contract by 3.9 per cent this year before accelerating next year. The rebound follows a strong 2025, when the country grew by 6.2 per cent, the fastest pace among the six Gulf Cooperation Council (GCC) economies.
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The IMF report comes as Minister of Economy and Tourism Abdulla Bin Touq Al Marri said the UAE will see a“counter-attack year” in 2027 after slow economic growth due to the war, as the economy is expected to bounce back strongly.
He added that the country will come back very strongly, with a“huge rebound happening here.”
Last week, the World Bank also projected a strong rebound in the UAE economy, forecasting 9.5 per cent growth for 2027 after a 1.6 per cent contraction in 2026.
The UAE's projected 2026 dip is modest compared with several regional peers. It is also broadly in line with Saudi Arabia, the region's largest economy, which the IMF expects to contract by 3.3 per cent this year.
The 7.7 per cent forecast for 2027 places the UAE among the stronger performers in the region. The projection is well above the 6.3 per cent growth the IMF expects for the wider Middle East and Central Asia region.
Since the outbreak of the Middle East war involving the US, Israel and Iran on February 28, Tehran has targeted Gulf countries, including the UAE, with missiles and drones. As a result, both the oil and non-oil sectors have been impacted by the regional conflict.
Saudi Arabia, after expanding by 4.6 per cent in 2025, is projected to see growth of 7.9 per cent in 2027.
The other Gulf economies are also expected to bounce back next year after contracting in 2026, led by Qatar (18.8 per cent), Kuwait (17.1 per cent), Bahrain (13.9 per cent) and Oman (2.2 per cent).
Kuwait is projected to rebound by 17.1 per cent next year, up from 2.7 per cent growth in 2025 and a forecast contraction of 16.7 per cent in 2026. Bahrain is expected to expand by 13.9 per cent in 2027, compared with 3.5 per cent in 2025 and a projected 11.3 per cent decline this year.
Oman is the only GCC economy that the IMF expects to keep growing through 2026, with a projected expansion of 4.1 per cent. Growth is forecast to ease to 2.2 per cent in 2027, after 2.4 per cent in 2025.
For the wider Middle East and Central Asia region, the IMF forecasts GDP growth of 6.3 per cent in 2027, following a 0.3 per cent contraction this year and growth of 3.7 per cent in 2025. Among oil exporters as a group, growth is projected to jump to 7.4 per cent next year, from a 3.8 per cent contraction in 2026.
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