Dubai:The International Monetary Fund (IMF) has projected that the UAE economy will grow by 7.7% in 2027, marking an increase of 2.4 percentage points from previous forecasts issued last April. This growth is attributed to the UAE's substantial financial buffers, advanced infrastructure, and economic and technological capabilities, which enhance its readiness to seize future growth opportunities and address regional and global challenges.
According to Wam, the announcement was made during a press conference organized by the Dubai International Financial Centre (DIFC) in cooperation with the IMF. The conference, themed 'Resilience in the Face of Challenges Diverging Economic Outlooks in the Middle East and North Africa,' featured Dr. Jihad Azour, Director of the IMF's Middle East and Central Asia Department, who presented the key findings of the October 2026 Regional Economic Outlook for the Middle East and Central Asia.
The report emphasizes the UAE's financial flexibility, allowing the use of fiscal policies to support economic activity while maintaining fiscal sustainability. Investment in infrastructure, supply-chain efficiency, and business continuity are highlighted as crucial factors. Dr. Azour noted that the UAE is well-positioned to benefit from rapid developments in artificial intelligence (AI) due to past investments and its advanced infrastructure, with continued AI investment potentially adding 0.5 percentage points to annual economic growth.
The report also suggests that AI adoption could increase annual economic growth across the Middle East and Central Asia by 0.1 to 0.6 percentage points, varying by countries' readiness and technological deployment capabilities. It underscores the need for investment in digital infrastructure, human capital, and innovation ecosystems to enhance productivity and growth diversification.
Inflation across the Gulf Cooperation Council (GCC) countries is projected to decline to 2.4% in 2027, reaching around 2% from 2028 onwards, aided by falling commodity prices and fiscal discipline. The report stresses the importance of export diversification, alternative trade corridors, and stronger economic integration to bolster resilience against external shocks.
Furthermore, the IMF highlights investment in education, skills development, and labor market flexibility as vital for boosting productivity and economic diversification, alongside structural reforms and private sector engagement. Since 2020, the IMF has approved approximately US$48 billion in financing for the Middle East and Central Asia and implemented numerous technical assistance projects to support regional stability and sustainable development.
The report concludes that embracing global technological changes, enhancing trade integration, and diversifying economic activities will create new opportunities for increased productivity, investment, and sustainable growth across the region.