The United Arab Emirates (UAE) economy is projected to expand by 8.5 percent in 2027, driven by robust fundamentals, including a resilient business environment, strong fiscal resources, and government-led investments, according to a recent report by Fitch Ratings. The growth forecast reflects the country’s continued recovery from regional geopolitical challenges and its strategic emphasis on non-oil sectors.
Fitch’s report titled "The UAE's Non-Oil Growth Model" underscores the nation's structural strengths, such as its advanced infrastructure, extensive global connectivity, and business-friendly policies, which have positioned the UAE as a key destination for international investment and skilled talent. The ratings agency anticipates the non-oil economy will grow by 6.1 percent in 2027 following a contraction of 3.7 percent in 2026, with further expansion of 4.3 percent expected in 2028. The non-oil sector is forecasted to be 2.2 percent larger in 2027 compared to 2025.
The report highlights Abu Dhabi’s significant role in supporting the overall economy. Fiscal strength and sovereign wealth assets, particularly those managed by the Abu Dhabi Investment Authority, form a cornerstone for sustained growth and economic stability. Abu Dhabi’s government spending is expected to increase by 19 percent in 2026, aimed at bolstering infrastructure, enhancing investor confidence, and stimulating economic activity. Fitch projects annual fiscal surpluses exceeding 8 percent of GDP through 2028, bolstered by investment income from sovereign wealth funds.
Fitch maintained the UAE’s sovereign credit rating at AA- with a Stable Outlook, while affirming Abu Dhabi’s AA rating also with a Stable Outlook. The agency cited Abu Dhabi’s strong financial buffers and balanced fiscal position as key factors underpinning creditworthiness amid prevailing regional uncertainties.
Government plans to raise capital expenditures on infrastructure and strategic projects through 2026 and 2027 are expected to support broader economic activity and improve the resilience of the country’s infrastructure. Additionally, improvements to the operating environment are anticipated, including streamlined administrative processes for businesses and residents.
Targeted government initiatives are expected to benefit sectors such as artificial intelligence, technology, financial services, and decarbonization. The UAE’s competitive tax regime, well-established regulatory framework, and high level of international connectivity remain attractive factors for foreign investment. According to the report, the UAE ranked fifth among 69 economies in the IMD World Competitiveness Ranking, reflecting the strength of its business environment.
Population growth is also projected to contribute positively to economic dynamics. After an estimated 1 percent decline in 2026, the UAE’s population is forecast to increase by 2 percent in 2027 and 3 percent in 2028, supported by favorable employment opportunities, competitive wages, and long-term residency options like the Golden Visa programme, which had issued over 350,000 visas by 2025.
The tourism and logistics sectors are expected to recover gradually as regional stability improves and trade routes normalize. In addition to non-oil sector growth, stronger oil production will play a significant role in overall GDP expansion, with real GDP projected to grow by 0.9 percent in 2026 before accelerating sharply in 2027 and moderating to 3.8 percent in 2028.
Paul Gamble, Senior Director at Fitch Ratings, emphasized that the UAE’s fundamental strengths will continue to support the resilience of its diversified economy. The country’s ability to mitigate economic shocks through proactive government policies, infrastructure development, and sovereign capital access remains a key factor in its ongoing recovery and growth outlook.