Abu dhabi: The latest edition of the Gulf Economic Update (GEU) - Fall 2025, issued today by the World Bank, forecasts that the UAE economy will grow by 4.8 percent. The report, titled "The Gulf's Digital Transformation: A Powerful Engine for Economic Diversification," confirmed that the UAE continues to achieve strong and broad-based growth, with balance across oil and non-oil sectors.
According to Emirates News Agency, the report projects that the real GDP of the UAE will grow by 4.8 percent in 2025, highlighting the country's leadership in diversifying its export base. In comparison, the report forecasts economic growth of 3.8 percent for Saudi Arabia, 3.5 percent for Bahrain, 3.1 percent for Oman, 2.8 percent for Qatar, and 2.7 percent for Kuwait.
The report highlights three main pillars: the evolution of economic diversification indicators over the past decade, tracking macroeconomic developments, and focusing on digital transformation. It examined the results of economic diversification efforts in GCC countries over the past decade, indicating moderate progress, with some promising indicators emerging in recent years.
The rapid digital transformation in the Gulf and the acceleration of artificial intelligence adoption are underscored in the report, noting that all GCC countries boast advanced telecommunications networks, with more than 90 percent 5G coverage and affordable high-speed internet. Large investments in data centres and high-performance computing are strengthening AI readiness, with the UAE and Saudi Arabia emerging as leaders regionally and internationally.
Safaa El Tayeb El Kogali, World Bank Division Director for the Gulf Cooperation Council, emphasized that diversification and digital transformation are necessities for achieving long-term economic stability and prosperity. She acknowledged the remarkable digital leap achieved by GCC countries and noted that strong infrastructure, growing computing power, and increasing AI-related skills and competencies enhance the region's position for leadership and innovation, provided environmental and labour-market challenges are addressed proactively.
The report also highlighted that women's participation in STEM fields in the Gulf exceeds the global average, enhancing the region's digital competitiveness. It recommended supporting small and medium-sized enterprises (SMEs) in adopting AI to enhance innovation and implementing training programmes to upskill the workforce and mitigate labour-market gaps, in order to maximise the benefits of diversification and digital transformation.