The UAE – big plans and a bright outlook

In 2025, the UAE is continuing with its economic transition toward non-hydrocarbon activities and diversified revenues under the ‘We the UAE 2031’ plan. The series of reforms, impacting all fields of the economy, has been supporting strong and steady growth.

According to an IMF field report released in January, “near-term growth is expected to remain healthy at around 4 percent in 2025, despite lower-than-expected oil production related to OPEC+ agreements. Non-hydrocarbon activity is boosted by tourism, construction, public expenditure and continued growth in financial services.”

Oil revenue should decline as production is reduced and prices remain volatile, while non-oil revenue should grow, strengthened by the new corporate income tax. Abdullah bin Touq Al Marri, the UAE minister of economy, expects GDP growth of 6 percent this year, despite global political and economic uncertainty. The banking sector has benefited from this strong domestic activity, according to an S&P Global Rating report. And the upward trend should continue in 2025.

Investor-friendly approach

This growth-oriented environment has attracted new foreign and local investors. The number of companies operating in the emirates surged to over 1 million in mid-2024, up from 405,000 in the first half of 2020. This figure is expected to continue rising, on the back of moves from member states to simplify processes for establishing businesses. At the end of 2024, Abu Dhabi announced the setting up of a single centralized business registry authority – the Abu Dhabi Registration Authority. The UAE is also continuously approaching foreign investors and looking for new trade agreements. In recent months, officials have begun turning their eyes toward Asia and building business bridges with Eastern countries. At the Investopia 2025 summit, held recently in Abu Dhabi, Arab, Central Asian states and Azerbaijan signed an economic partnership to boost trade and investment. Several agreements were also signed with Chinese private and public entities.

All in on tech

A large part of the ‘We the UAE 2031’ action plan is dedicated to new technologies. Authorities have been looking to accelerate the digital transformation of financial services. Their ‘Financial Infrastructure Transformation Program,’ launched in 2023 and supervised by the Central Bank, should be completed by 2026. The goal is to double the contribution of the digital economy to non-oil GDP from 11.7 percent to over 20 percent in the next 10 years. The program involves new digital payment possibilities through ‘Al Etihad Payments,’ the creation of an open finance regulation and a new licensing system for stablecoins. Other initiatives include the launch of the domestic card ‘Jaywan’ and the first cross-border payment for the Central Bank digital currency (the digital dirham) with China.

Another key area of focus is artificial intelligence. The UAE has decided to go big on R&D for the new technology to drive economic growth and position itself as a key hub in the global race for AI. The American giant Microsoft has decided to join in, announcing a USD 1.5 billion investment in the Emirati startup G42. Both companies have also just launched the ‘Responsible AI Foundation’ in Abu Dhabi to promote good standards and practices.

Connecting people

While Dubai remains one of the top destinations for visitors and investors alike, the authorities are not resting on their laurels. With the ‘Dubai Economic Agenda D33,’ they plan to double the size of the economy by 2033 and become part of the world’s top three urban economies. One of the initiatives is to invest in its infrastructure. Dubai International Airport welcomed 86.9 million passengers last year, making it the world’s busiest hub for the tenth year. However, its facilities cannot be extended. The authorities have thus decided to invest in the Al Maktoum International Airport, located 30 km south of the city, and transform it into a monumental ‘airport city.’ The new airport will cover an area of 70 square km and feature 400 aircraft gates, alongside five parallel runways. It will have the capacity to manage an annual cargo volume of 12 million tons. There are also plans to revamp the train network. The Transit-oriented Development (TOD) plan, which was approved in March, is set to put in place the 20-Minute City Concept. This should allow residents to reach their destination within 20 minutes using different means of public transportation, as part of an effort to reduce the use of cars. Two other ambitious railway projects are in the works involving other emirates. Etihad Rail has announced a high-speed train linking Dubai and Abu Dhabi, with a new passenger train fleet connecting all emirates unveiled. Located in Abu Dhabi, Dubai, Sharjah and Fujairah, the four passenger rail stations will also enable users to reach bus and metro networks.

A global destination

These initiatives should give a major boost to what is already a healthy tourism industry. According to the Dubai Department of Economy and Tourism (DET), the city welcomed 18.72 million international overnight visitors in 2024, up 9 percent year-on-year. This total surpasses the previous record of 17.15 million in 2023. The hospitality sector comprised 154,016 total available rooms across 832 establishments last year. But the emirate is vying for more, aiming to attract AED 100 billion in tourism investments. For that, Dubai is doing what it does best: opening high-profile hotel and Food and Beverage venues to attract the world’s glitz and glamour. Last year saw the opening of One&Only One Za’abeel, SIRO One Za’abeel and The Lana Dorchester Collection, among others. The upcoming months look equally promising, with the Jumeirah Marsa Al Arab and the Mandarin Oriental Downtown in the pipeline. Providing another attraction and located in the Dubai Marina, Ciel is set to be the world’s tallest hotel. All the metrics are looking bright, with the average occupancy rising to 78.2 percent, up from 77.4 percent in 2023. Meanwhile, occupied room nights went from 41.70 million in 2023 to 43.03 million last year. Partnerships with celebrities are proving to be another trump card. Bollywood family Saif and Sara Ali Khan, Korean actors Park Shin- Hye and Park Hyung-Sik, Colombian singer J.Balvin and YouTuber Mr. Beast are among those promoting the destination.

Abu Dhabi also has big hospitality plans for the coming years. Officials have announced 2,300 extras rooms, taking the total to more than 36,000 by the end of 2025. The aim is to reach 50,000 in 2030. Yas Island’s resorts will also get a face-lift. Developer IHG is set to transform six hotels within the Yas Plaza complex into a single Vignette Collection resort. The more understated neighbours Sharjah and Ras Al Khaimah have announced a series of new prestige establishments as well.

Dubai and Abu Dhabi are also making a name for themselves in the world of global events. Both emirates host dozens of high-profile festivals, summits and conferences every year, attracting millions of revellers. In another development, Dubai College of Tourism launched an apprenticeship to train local aspiring chefs in culinary operations in 2024, in partnership with key players such as Hilton, and JW Marriott Marquis Hotel Dubai.