The UAE economy is expected to grow by 5% in 2025, supported by resilient domestic demand and a favourable investment climate, according to new forecasts from global banking giant Standard Chartered. The figure is slightly higher than the UAE Central Bank’s projection of 4.4% for the same year, though lower than the 5.4% estimated for 2026.
In its latest Global Market Outlook report, Standard Chartered also predicted sustained inflation levels of 3% for the UAE over the next three years. This outlook contrasts with the Central Bank’s most recent data showing inflation at just 1.1% in March 2025, driven mainly by increases in non-tradeable goods and services.
The bank forecast a steady improvement in the country’s current account balance, projecting it to reach 7% of GDP in 2025, 8% in 2026, and 10% by 2027. The positive outlook reflects strong export performance, stable oil revenues, and ongoing diversification efforts.
Manpreet Gill, Chief Investment Officer for Africa, the Middle East and Europe at Standard Chartered, described the UAE and broader Gulf region as a “growth bright spot” amid tepid global conditions.
“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,” said Gill in comments to Khaleej Times. “The long-term focus remains on the region’s potential, particularly as global growth remains subdued in many major economies.”
Despite regional tensions, Gill noted that oil prices have largely stabilised, with current levels returning to pre-conflict benchmarks. However, oil oversupply remains a dominant theme in the global energy market.
The bank expects West Texas Intermediate (WTI) crude to trade around $65 per barrel over the next three to 12 months, citing a persistent supply surplus. “A standalone demand-supply outlook continues to argue for an oversupplied oil market,” the report stated. “Geopolitical risks may lead to temporary spikes, but Opec+ spare capacity should help offset any short-term disruptions.”
The UAE has maintained its position as one of the region’s strongest economies, supported by diversified investments, trade resilience, and robust tourism and real estate activity. The country continues to attract global capital, driven by its pro-business reforms and stable financial system.
As global uncertainty continues, Standard Chartered emphasised that the Gulf’s economic outlook remains solid, with the UAE at the forefront of regional growth.
