The Abu Dhabi Bank forecasts stronger economic growth in the Middle East, led by the United Arab Emirates
According to First Abu Dhabi Bank's (FAB) Global Investment Outlook 2026 report, the global economy faces modest and uneven growth, with GDP growth of just 1.5% in advanced economies, while emerging markets, particularly the Middle East and North Africa (MENA), will exceed this figure.
UAE leads growth
Specifically, the report estimates that the United Arab Emirates will lead the region's growth at 5.6%. This strong performance reflects the country's successful economic diversification efforts, the expansion of non-oil sectors and the continuation of regulatory and legislative reforms that have strengthened the business environment. The nation's strategic position as a centre for trade, finance and services further consolidates its appeal as a stable and secure destination for long-term investment, even amid global currency volatility and shifts in capital flows.
The FAB report highlights the broader challenges facing the global economy, including increased geopolitical tensions, technological disruptions and structural market transformations. Although inflationary pressures have moderated from previous highs, they remain a key macroeconomic risk, especially given ongoing supply constraints and geopolitical uncertainties. Monetary policy in advanced economies is expected to remain cautious in 2026, with slower interest rate cuts in the United States compared to 2025.
Technological innovation is identified as a key driver of structural change, as advances in artificial intelligence, automation and digital platforms are reshaping asset and wealth management practices. The United Arab Emirates, with its significant investments in smart infrastructure and digital economies, coupled with flexible regulatory frameworks, is well positioned to capitalise on these trends and consolidate its role as a regional and global investment hub.
Diversification
The report highlights the importance of portfolio diversification to manage risk in a context of market volatility and structural change. In this context, the GCC economies, particularly the UAE, stand out as anchors of stability and growth. Institutional strengthening, regulatory evolution and an increasingly important role in global capital allocation are transforming the region into a hub for professionally managed investment solutions.
Looking ahead, FAB forecasts global GDP growth of 3.1% in 2026, slightly below 2025 levels, while regional economies, led by the UAE, are expected to maintain stronger momentum, supported by the expansion of the non-oil sector and ongoing economic and political reforms. The report suggests that the Middle East and North Africa are set to play an increasingly influential role in global investment portfolios, offering a combination of growth potential, relative stability and attractive returns.
In conclusion, the Global Investment Outlook 2026 report describes the UAE as a country confidently entering a new phase of economic transformation, guided by a diversified economy, forward-looking policies and a clear strategic vision. The report positions 2026 not just as a calendar year, but as a pivotal moment that reinforces the UAE's position on the global economic and investment map.