Bullish Emirates NBD says Dubai economy to grow 4.5% in 2026

Emirates NBD, one of the largest banks in the region, said strong momentum, rising tourism, easing regional tensions, and robust private and public sector activity will lead to continued strong performance from Dubai’s economy in 2026.

In a paper published on Tuesday, Emirates NBD’s Senior Economist, Daniel Richards, said Dubai will expand at 4.5 per cent, outpacing the IMF’s global growth forecast of 3.1 per cent for 2026.

Strong momentum

Although full-year GDP figures are not available, the momentum remains strong as year-on-year growth of 4.4 per cent in 2025 so far compares with 3.3 per cent growth in 2023 and 3.2 per cent in calendar 2024. Dubai economy will enter 2026 on a strong momentum, with the monthly PMI survey from S&P Global rising to 54.5 in both October and November, the strongest reading since January 2025, and new orders are picking up more rapidly.

Richards wrote: “Looking ahead, anticipated looser monetary policy imported from the US as the Federal Reserve cuts rates, and a reduction in global trade uncertainty will both benefit the wider UAE.”

Rising visitors numbers

Emirates NBD projected that the easing of regional tensions and its potential benefit to the tourism sector will benefit Dubai. “With a tentative peace in place in Gaza, and rhetoric between the US and Iran cooling, we see scope for another strong year for Dubai’s tourism trade in 2026 after projected growth of around 5 per cent in 2025 (there were 15.7m visitors over January to October, up 5 per cent YoY).

The growth potential for the sector next year is boosted by the fact that the YoY decline in South Asian visitors seen in 2025 will have passed through the base. More stringent visa regulations prompted an 8.4 per cent YoY decline in visitors from the region, usually one of the largest source markets, over the first 10 months of 2025.

“However, growth has recently turned positive on a monthly basis, while the annualised decline has softened, and we see upside potential here for next year. This will combine with ongoing robust growth in visitors from other source markets, enticed by the continuing improvement of the tourist offering,” said Emirates NBD.

The expansion of existing conferences and expositions, and the launch of new events, will also encourage tourism growth, while medical tourism is playing a greater role. The bank also highlighted the development of Al Maktoum International Airport, saying it will underpin activity over the next decades.

Dubai population growth

Population expansion has shown no signs of abating in 2025, said the bank.

Many of the factors around entertainment and hospitality offerings that are encouraging the strong inflow of tourists are also encouraging rapid growth in the domestic population, alongside national factors such as the low tax regime (especially while taxes are rising in many source countries), high levels of safety and security, and the introduction of the extended stay Golden Visa in the past several years.

Number of Dubai’s inhabitants breached the 4 million mark for the first time during the year. The official estimate put the population at 4.04 million as of mid-November, up 5.4 per cent YoY and 18.7 per cent from November 2020.

“We expect that the factors supporting population growth will remain in play in 2026, not least given the stated government target of hitting 5.8 million inhabitants by 2040. This will drive demand for real estate, boosting construction activity, and for a range of other services including education, telecoms, and healthcare,” Richards wrote.