UAE to Lead Middle East and Africa in GDP Growth for Second Year in 2025

The UAE is set to top economic growth charts in the Middle East and Africa for the second year in a row in 2025, according to the Institute of International Finance (IIF). The country is expected to attract $15 billion (Dh55 billion) in portfolio inflows, reinforcing its position as a key financial hub with a resilient and diversified economy.

In 2023, the UAE secured around $30 billion in foreign direct investment—equivalent to 6% of its GDP—making it the top FDI recipient in the region and one of the highest among emerging markets globally. Analysts attribute this strong investor confidence to a range of pro-business reforms, including full foreign ownership in selected sectors, improved intellectual property rights, and simplified licensing processes.

“The UAE continues to be a magnet for international investors due to its strategic policy reforms and business-friendly environment,” said Marcello Estevão, managing director and chief economist at the IIF. He projects GDP growth of 4.0% in 2024 and 5.1% in 2025, the highest in the region.

He also highlighted the UAE’s regulatory advancements in digital currencies as a key factor in attracting global investors, noting that digital currency issuance is part of the country’s 2023–2026 strategic roadmap.

Regionally, the GCC’s economic growth is expected to rebound to 3.5% in 2025 from 0.9% in 2024, as oil production cuts ease. While current account and fiscal surpluses are narrowing due to lower oil revenues and rising imports for diversification, countries like the UAE and Saudi Arabia are making notable progress in improving the business environment and reducing reliance on hydrocarbons through investments in digitalization and AI.