Photo Credit: Adobe Stock
Dubai, UAE — December 2025 — The World Bank’s Gulf Economic Update for Fall 2025, forecasted that the UAE economy will grow by 4.8 percent in 2025.
The report, titled “The Gulf’s Digital Transformation: A Powerful Engine for Economic Diversification,” confirmed the UAE continues to achieve strong and broad-based growth balanced across oil and non-oil sectors, solidifying its leadership in diversifying its export base.
According to the Emirates News Agency, the report projected varied economic growth across the Gulf Cooperation Council region for 2025, with Saudi Arabia at 3.8 percent, Bahrain at 3.5 percent, Oman at 3.1 percent, Qatar at 2.8 percent, and Kuwait at 2.7 percent.
Its analysis rested on three pillars: tracking macroeconomic developments, examining the evolution of economic diversification over the past decade, and focusing on digital transformation.
While diversification efforts across the GCC show moderate progress, promising indicators have emerged in recent years.
A rapid digital transformation and accelerated adoption of artificial intelligence are highlighted as key drivers. All GCC countries boast advanced telecommunications networks, with more than 90 percent 5G coverage and affordable high-speed internet.
Large investments in data centres and high-performance computing are strengthening AI readiness, with the UAE and Saudi Arabia emerging as leaders both regionally and internationally.
This progress is supported by enabling ecosystems that include facilities, financing for innovation, and government adoption of generative AI applications.
World Bank Division Director for the Gulf Cooperation Council, Safaa El Tayeb El Kogali, stated that diversification and digital transformation are now a necessity for long-term economic stability and prosperity.
She noted the GCC’s digital leap is remarkable, with strong infrastructure, growing computing power, and increasing AI-related skills enhancing the region’s potential for leadership and innovation, provided environmental and labour-market challenges are addressed proactively.
The report further indicated that women’s participation in STEM fields in the Gulf exceeds the global average, boosting the region’s digital competitiveness.
To maximize the benefits of these trends, the World Bank recommends supporting small and medium-sized enterprises in adopting AI to enhance innovation and implementing training programmes to upskill the workforce and mitigate labour-market gaps.
