Dubai's July recovery highlights the robust non-oil expansion trajectory of the UAE.
The current outlook for the non-oil private sector growth in the United Arab Emirates (UAE) is positive but showing some moderation in expansion pace. Dubai, in particular, is experiencing rapid growth and resilience, outperforming the nationwide trend in July 2025.
Dubai's non-oil private sector is experiencing the fastest expansion since early 2023. This robust growth is driven by strong demand, investor confidence, and effective economic diversification efforts in Dubai. In contrast, nationwide in the UAE, while the non-oil private sector continues to expand, the pace has slowed somewhat compared to previous months.
The UAE’s overall Purchasing Managers’ Index (PMI) for non-oil business activity fell slightly from 53.5 in June to 52.9 in July 2025, marking the weakest expansion since June 2021. The decline was due to a softer rise in new business, regional tensions affecting client sentiment, weaker tourism flows, and global trade disruptions.
Despite these challenges, the UAE non-oil sectors are still forecasted to sustain a healthy growth rate of about 4.5% in 2025 and 2026, backed by diversified sectors such as finance, tourism, logistics, trade, and public investments. Employment growth is also expected to be strong with low unemployment in the country.
In comparison, Dubai's non-oil private sector improved in July, as indicated by a rise in the Dubai PMI from 51.8 in June to 53.5. The growth in Dubai was driven by stronger demand, rising client enquiries, and a marked pick-up in sales volumes. Firms in Dubai expanded output at the fastest rate in five months, continued hiring, and built up inventories to meet anticipated demand.
In terms of sector outlook, Dubai is a key hub of business, with a robust and optimistic outlook. The UAE, on the other hand, has a positive but moderated growth, with diverse non-oil sectors expanding.
Notably, the International Monetary Fund expects UAE GDP to rise by about 4% in 2025 and 5% in 2026. The World Bank predicts the UAE's non-oil economy will expand by 4.9% next year. The hydrocarbon sector is forecast to grow 4.1% in 2025 and 8.1% in 2026.
In summary, Dubai is outpacing the UAE average in non-oil private sector growth, experiencing rapid expansion in July 2025, while the nationwide growth remains solid though more moderate. This reflects a generally strong but somewhat uneven recovery and expansion across the country.
- The news of Dubai's non-oil private sector growth outpacing the UAE average is noteworthy, as it showcases a faster expansion since early 2023, driven by strong demand, investor confidence, and effective economic diversification efforts.
- Despite the UAE non-oil sector's growth moderating slightly in July 2025, it still promises a healthy expansion rate of about 4.5% in 2025 and 2026, with sectors like finance, tourism, logistics, trade, and public investments contributing significantly.
- Conversely, the sports world might not find such growth comparatively engaging, but the political and financial implications of this disparity could shape future business decisions and investment strategies in the UAE.
- The International Monetary Fund and the World Bank predict a positive outlook for the UAE's overall GDP and non-oil economy, with projections of 4% growth in 2025 and 5% in 2026, further emphasizing the resilience and potential of the UAE's non-oil sectors.
