IMF raises UAE’s 2027 growth forecast by 2.4 percentage points to 7.7%

The International Monetary Fund (IMF) has raised its forecast for the UAE’s economic growth in 2027 to 7.7%, an increase of 2.4 percentage points from its projection in April, citing the country’s financial buffers, advanced infrastructure and technological capabilities.

The forecast was announced at a press conference organised by the Dubai International Financial Centre (DIFC) in cooperation with the IMF, under the theme “Resilience in the Face of Challenges: Diverging Economic Outlooks in the Middle East and North Africa”.

Jihad Azour, director of the IMF’s Middle East and Central Asia Department, presented the findings of the fund’s October 2026 Regional Economic Outlook for the Middle East and Central Asia.

The report highlighted the UAE’s substantial financial buffers, which provide the government with flexibility to use fiscal policy to support economic activity when needed while maintaining fiscal sustainability over the medium term. It also underscored the importance of infrastructure investment, supply-chain efficiency and business continuity.

Azour said economies across the region had demonstrated resilience in responding to economic crises, drawing on policies and measures developed in recent years, including during the COVID-19 pandemic, to sustain economic activity, support affected sectors and accelerate recovery.

AI investment could add 0.5 percentage points to UAE growth

The IMF identified artificial intelligence (AI) as a potential driver of the UAE’s future economic growth, noting that the country is well positioned to benefit from rapid technological developments because of its earlier investments, advanced infrastructure and technological capabilities.

Continued investment in AI could add approximately 0.5 percentage points to the UAE’s annual economic growth, according to the report.

Across the Middle East and Central Asia, AI adoption could increase annual economic growth by between 0.1 and 0.6 percentage points over the medium term. The extent of these gains will depend on countries’ technological readiness and their ability to deploy advanced technologies.

The IMF stressed the need for continued investment in digital infrastructure, human capital, skills training and innovation ecosystems. It also highlighted the opportunity to develop AI-based services for export to global markets, helping improve productivity and diversify economic activity.

GCC inflation expected to ease

The report projected that average inflation across Gulf Cooperation Council (GCC) countries would decline to 2.4% in 2027 and settle at approximately 2% from 2028 onwards, supported by lower commodity prices and continued fiscal discipline.

To strengthen the region’s resilience to external shocks, the IMF also emphasised the importance of diversifying exports and markets, developing alternative trade corridors and deepening economic integration between countries.

Investment in transport and logistics infrastructure and stronger trade connectivity were identified as key priorities for improving regional supply chains and facilitating commerce.

The report further highlighted the role of education, skills development and labour market flexibility in raising productivity and supporting economic diversification. Continued structural reforms, improvements to the investment environment and a stronger private sector were also identified as important factors in sustaining growth.

IMF expands regional economic support

The IMF said it had approved approximately US$48 billion in financing for countries across the Middle East and Central Asia since 2020. During fiscal year 2026, it also implemented 437 technical assistance and capacity development projects across 31 countries to support economic stability and sustainable development.

The report concluded that countries across the region could strengthen their long-term growth prospects by capitalising on technological advances, improving trade integration and diversifying their economic activities to create new opportunities for productivity, investment and sustainable development.