UAE set for 4.8% growth surge as World Bank hails Gulf’s digital boom

The UAE economy is expected to expand by 4.8 per cent in 2025, according to the World Bank’s latest Gulf Economic Update published in Washington. The report said the country continues to record strong and broad-based growth supported by balanced performance across the oil and non-oil sectors.

Titled “The Gulf’s Digital Transformation: A Powerful Engine for Economic Diversification,” the update highlighted the UAE’s position as a leader in diversifying exports and strengthening non-oil contributions to GDP. The World Bank described the 2025 forecast as evidence of continued resilience and progress on long-term reform.

UAE leads Gulf growth outlook

Across the region, the report projected growth of 3.8 per cent for Saudi Arabia, 3.5 per cent for Bahrain, 3.1 per cent for Oman, 2.8 per cent for Qatar and 2.7 per cent for Kuwait.

The update focused on three areas: the evolution of diversification efforts over the past decade, macroeconomic trends across the Gulf and the increasing role of digital transformation. The World Bank said diversification progress has been moderate but is showing promising momentum in recent years.

Digital transformation has accelerated across Gulf states, supported by advanced telecommunications networks that provide more than 90 per cent 5G coverage and affordable high-speed internet.

Significant investment in data centres and high-performance computing is also strengthening readiness for artificial intelligence, with the UAE and Saudi Arabia emerging as regional and global leaders.

Safaa El Tayeb El Kogali, World Bank Division Director for the Gulf Cooperation Council, said diversification and digital transformation are now essential for long-term stability and prosperity. She said the Gulf’s progress is notable and that strong infrastructure, expanding computing capacity and rising AI-related skills place the region in a strong position for future innovation if labour market and environmental challenges are addressed.

The report also noted that women’s participation in STEM fields in the Gulf is above the global average, enhancing regional competitiveness. It recommended increased AI adoption among small- and medium-sized enterprises and expanded training programmes to help close labour market gaps and support economic transformation.