UAE economy poised for counterattack with 9.5% growth in 2027

By the Editorial Team · Friday, October 9, 2026

The World Bank projects the UAE economy will contract by 1.6 percent in 2026 before rebounding sharply with 9.5 percent growth in 2027, driven by the resolution of conflict-related disruptions and the reopening of the Strait of Hormuz. This recovery reflects deferred economic activity during the downturn, highlighting the UAE's fiscal resilience despite the temporary shock to its vital oil exports and trade routes.

The United Arab Emirates economy is forecast to recover strongly in 2027, with growth projected at 9.5 percent following a contraction of 1.6 percent in 2026, according to the World Bank. This rebound comes after significant disruption linked to regional conflict and the temporary closure of the Strait of Hormuz, a vital shipping route for Gulf oil exports.

The World Bank’s latest report, *From Divide to Opportunity: AI, Jobs, and Growth*, projects that the Gulf Cooperation Council (GCC) economies as a whole will shrink by 4.3 percent in 2026 before expanding by 10.3 percent in 2027, assuming the easing of conflict-related disruptions early next year. Within the GCC, Qatar and Kuwait are expected to experience particularly sharp recoveries, with growth rates of 26.7 percent and 22 percent respectively, following contractions of 20.9 percent and 14.6 percent in 2026.

UAE Minister of Tourism and Economy Abdullah Bin Touq Al Marri highlighted that the scale of the anticipated rebound should be viewed in the context of economic output being deferred rather than lost. Speaking to CNN, he explained that the sizable growth in 2027 largely reflects the recapturing of activity postponed during 2026, effectively combining output from two years into one.

The World Bank’s baseline forecast anticipates UAE GDP growth of 6.2 percent in 2025, followed by a modest contraction in 2026, and then a significant recovery in 2027. This pattern underscores the exceptional impact of this year’s disruptions, which have uniquely affected Gulf oil exporters in ways that differ from past energy shocks. The closure of the Strait of Hormuz has been particularly damaging, halting exports and trade flows critical to the region’s economies.

Despite the challenges, the UAE is expected to maintain a fiscal surplus of 4.2 percent of GDP in 2026 and a current account surplus equivalent to 8.2 percent of GDP, signaling ongoing fiscal resilience amid the downturn. The World Bank’s forecast assumes that conflict-driven disruptions will persist through the end of 2026 but begin to ease in early 2027, facilitating the anticipated economic recovery.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.