IMF downgrades UAE growth outlook to 3.1% in 2026

The United Arab Emirates’ economic growth outlook for 2026 has been revised downward due to spillovers from regional conflict, though the economy is expected to remain resilient and rebound in 2027, the International Monetary Fund (IMF) said on Tuesday.

According to its latest World Economic Outlook, the IMF projects the UAE to grow by 3.1 per cent in 2026, following a downward revision from its January forecast, reflecting the impact of disruptions to regional trade flows and energy markets.

Despite the downgrade, the Fund said the slowdown is expected to be moderate compared with more exposed economies in the region, supported by the UAE’s diversified economy and strong external buffers.

“Bahrain, Iran, Iraq, Kuwait, and Qatar are expected to be the hardest hit, while Oman, Saudi Arabia, and the United Arab Emirates will have less significant impact,” the IMF said.

Growth is projected to accelerate to 5.3 per cent in 2027, assuming normalisation of energy production and transportation networks as regional conditions stabilise.

“For all these economies, growth in 2027 is expected to rebound, based on the assumption that energy production and transportation are normalized over the next few months—an assumption that may need to be revised if the duration of the conflict extends and the degree of damage suffered gets reassessed.”

The IMF said the outlook remains subject to uncertainty, particularly if disruptions to shipping routes or energy infrastructure persist or intensify.

Attribution: Amwal Al Ghad English