UAE Economy Defies Regional Tensions with Slight First-Half Growth and Non-Oil Sector Resilience

Saturday 10 October 2026 09:20

Key Takeaways and Economic Performance

First-Half Performance: The UAE’s real Gross Domestic Product (GDP) reached approximately AED 962 billion, recording a growth rate of 0.4% compared to the same period in 2025.

Non-Oil Sector Surge: Non-oil real GDP grew by 1.8%, pushing its contribution to 79.2% of the total national economy, up from 78.1% in the previous year.

Leading Sectors: Trade activities topped the contribution to non-oil GDP at 16.2%, followed by financial and insurance activities, construction, and manufacturing, while real estate activities contributed 7.9%.

Q2 Challenges and Regional Pressures

Contribution from non-oil activities (such as tourism, transport, and trade) contracted by over 1% in the second quarter, impacted by regional tensions and war.

Second-quarter real GDP declined by over 2% to AED 476.9 billion.

S&P Global warns of potential pressures on profit margins for non-oil private sector companies due to reliance on imported inputs and inventory depletion.

Strategic Resilience Amid Energy Crisis

The World Bank projects a GCC economic contraction of 4.3% in 2026 due to the repercussions of the war in Iran and Strait of Hormuz disruptions.

The UAE possesses a strategic advantage: a pipeline connecting Abu Dhabi oilfields to the Port of Fujairah (outside the Strait) with a capacity of 1.8 million barrels per day, granting it a unique capability to reroute exports.