UAE growth to accelerate in coming years: Central Bank

Dubai: The Central Bank of the United Arab Emirates (CBUAE) projects a stronger economic outlook for the country over the next two years, underpinned by continued momentum in the non-oil sector and resilient financial system performance.

In its newly released 2024 Financial Stability Report, the CBUAE forecasts the UAE’s real GDP to expand by 4.4% in 2025 and accelerate further to 5.4% in 2026, following 4% growth in 2024. The upward trend reflects sustained economic diversification efforts and the robust state of the country’s financial and banking systems.

According to the report, the UAE’s banking sector remains well-capitalised and liquid, with improved asset quality supporting ongoing expansion. Financial stability risks remained broadly unchanged, supported by sound economic fundamentals and effective risk management.

The Central Bank’s analysis of macroeconomic trends and financial market conditions highlights ongoing stability in 2024, with the financial system maintaining its capacity to absorb shocks even under adverse scenarios. Stress tests conducted during the year confirmed that banks could continue lending while holding capital and liquidity well above regulatory thresholds.

The report also credits the operationalisation of the UAE Financial Stability Council, chaired by Sheikh Mansour bin Zayed Al Nahyan, as a key milestone in strengthening coordination among financial authorities. The Council has advanced systemic risk oversight and improved response mechanisms to emerging macro-financial threats.

Complementing the economic outlook, the non-bank financial institutions (NBFIs) sector—including insurance, finance companies, and exchange houses—recorded solid performance. The insurance sector posted 21.4% growth in gross written premiums, reaching Dh64.8 billion, with solvency remaining adequate.

Fintech, AI boom

Digital transformation in financial services also accelerated in 2024. FinTech adoption, digital payments, AI integration, and data analytics progressed across the sector. The launch of the domestic card scheme "Jaywan", broader uptake of the “Aani” Instant Payment Platform, and advancements in the Digital Dirham initiative further enhanced payment infrastructure efficiency and resilience.

CBUAE’s regulatory initiatives in 2024 included the introduction of new macroprudential tools, stricter cybersecurity standards, and expanded focus on climate risk assessment, aligning with international practices in sustainable finance.

Looking ahead, the Central Bank expects the UAE's financial system to remain on a stable footing, with growth prospects supported by prudent economic management, regulatory resilience, and proactive risk monitoring.

CBUAE Governor Khaled Mohamed Balama reaffirmed the institution’s commitment to advancing the UAE’s development agenda. “The UAE maintained strong economic and financial conditions in 2024, despite rising global risks. At CBUAE, we continue to develop a resilient regulatory framework that supports sustainable growth and enhances financial stability,” he said.