The latest edition of the Gulf Economic Update (GEU) – Fall 2025, released today by the World Bank, forecasts that the UAE economy will grow by 4.8 percent.
The report, titled “The Gulf’s Digital Transformation: A Powerful Engine for Economic Diversification,” confirms that the UAE continues to achieve strong, broad-based growth, with balanced contributions from both oil and non-oil sectors.
Real GDP is projected to expand by 4.8 percent in 2025, and the UAE remains a leader in diversifying its export base.
The report also projects economic growth of 3.8 percent for Saudi Arabia, 3.5 percent for Bahrain, 3.1 percent for Oman, 2.8 percent for Qatar, and 2.7 percent for Kuwait.
It highlights three main pillars: the evolution of economic diversification indicators over the past decade, tracking macroeconomic developments, and focusing on digital transformation.
The report analyzed the outcomes of economic diversification efforts in GCC countries over the last decade, noting moderate progress with promising indicators emerging in recent years.
It also emphasized the rapid digital transformation in the Gulf and the accelerated adoption of artificial intelligence, noting that all GCC countries have advanced telecommunications networks, with over 90 percent 5G coverage and affordable high-speed internet.
Large investments in data centres and high-performance computing are enhancing AI readiness, with the UAE and Saudi Arabia standing out as regional and global leaders.
This progress is supported by enabling ecosystems, including facilities and financing for projects and innovation, as well as government adoption of generative AI applications.
Safaa El Tayeb El Kogali, World Bank Division Director for the Gulf Cooperation Council, stated that diversification and digital transformation are no longer optional but essential for long-term economic stability and prosperity.
She added that the digital leap made by GCC countries is remarkable, with strong infrastructure, growing computing power, and increasing AI-related skills enhancing the region’s potential for leadership and innovation, provided environmental and labour-market challenges are addressed proactively.
The report also noted that women’s participation in STEM fields in the Gulf exceeds the global average, strengthening the region’s digital competitiveness.
It recommended supporting SMEs in adopting AI to boost innovation, and implementing training programs to upskill the workforce and address labour-market gaps, to fully capitalize on the benefits of diversification and digital transformation.
