The World Bank’s latest Gulf Economic Update (GEU) for Fall 2025 projects the UAE economy to grow by 4.8% next year, reflecting continued momentum across both oil and non-oil sectors.

In its report, titled “The Gulf’s Digital Transformation: A Powerful Engine for Economic Diversification,” the World Bank said the UAE remains a regional leader in broad-based growth and in diversifying its export base. Real GDP is expected to rise by 4.8% in 2025.

The report also set out growth expectations for other Gulf states, forecasting GDP expansion of 3.8% for Saudi Arabia, 3.5% for Bahrain, 3.1% for Oman, 2.8% for Qatar, and 2.7% for Kuwait.

According to the World Bank, its assessment rests on three pillars: the evolution of diversification indicators over the past decade, regional macroeconomic trends, and the role of digital transformation.

The review said GCC economies have made moderate progress on diversification, with more promising signs emerging in recent years. It highlighted the region’s rapid digital transformation, supported by advanced telecom networks, more than 90% 5G coverage, and affordable high-speed internet. Rising investment in data centers and high-performance computing is strengthening AI readiness, led by the UAE and Saudi Arabia.

World Bank GCC Division Director Safaa El Tayeb El Kogali emphasized the importance of digital and economic diversification for long-term stability, praising the region’s digital progress as “remarkable” while acknowledging that environmental and labor market challenges persist.

The report also noted that women’s participation in STEM fields in the GCC exceeds the global average, thereby enhancing the region’s digital competitiveness.

To maximize the benefits of diversification and technological change, the World Bank recommends supporting small and medium-sized enterprises in adopting AI and expanding workforce training programs to bridge skills gaps.