World Bank forecasts UAE economy to grow above 5% in 2026–2027

Global economic outlook

Global growth is projected to ease to 2.6% in 2026 before improving to 2.7% in 2027, an upward revision from previous forecasts. Stronger-than-expected performance in the United States accounts for much of the improved outlook, though the 2020s are still on track to be the weakest decade for global growth since the 1960s.

Widening living standards gap

The report notes that sluggish global growth is widening income gaps. By the end of 2025, most advanced economies surpassed pre-2019 income levels, while about one-quarter of developing economies remained below them.

Regional growth projections

Growth in GCC countries is forecast to rise to 4.4% in 2026 and 4.6% in 2027. The MENAP region is expected to grow by 3.6% in 2026, accelerating to 3.9% in 2027.

Trade, inflation, and financial conditions

Global growth in 2025 was supported by a surge in trade ahead of policy changes, but this boost is expected to fade in 2026. Global inflation is projected to decline to 2.6% in 2026, with easing financial conditions helping to cushion slower growth.

Outlook for developing economies

Growth in developing economies is expected to slow to 4% in 2026 before edging up to 4.1% in 2027, while low-income countries are projected to grow faster at an average of 5.6% over 2026–2027. However, income gaps with advanced economies are likely to persist.

Policy challenges and priorities

The World Bank highlighted the need for policies focused on strengthening human and physical capital, improving the business environment, mobilising private investment, and restoring fiscal sustainability. Rising public debt makes credible fiscal frameworks essential to improving resilience and long-term growth prospects.