The Central Bank of the UAE (CBUAE) has published its Quarterly Economic Review for September 2026 and raised its 2027 real GDP forecast from 9.8% to 10.4%. The main driver is UAE oil output reaching 5 million barrels per day, with the hydrocarbon sector expanding 26.8%. The 2026 forecast is 1.6%. Inflation stays below global averages at 2.4% in 2026 and 1.9% in 2027.
What the September 2026 QER says
The CBUAE revised its medium-term real GDP projection. From Table 2.2 of the report:
| Indicator | 2025 | 2026 (f) | 2027 (f) |
|---|---|---|---|
| Overall GDP | +6.2% | +1.6% | +10.4% |
| Hydrocarbon | +4.3% | +2.4% | +26.8% |
| Non-oil | +6.8% | +1.3% | +4.9% |
Compared with the June QER, the 2027 forecast was raised by 0.6 percentage points (from 9.8%). The report states: "The UAE economy is expected to maintain positive growth momentum over the medium term, with overall real GDP growth projected at 1.6% in 2026 and 10.4% in 2027." The report's data cut-off is 11 August 2026.
Why 2027 looks so strong
The hydrocarbon sector is projected to expand 26.8% in 2027 as UAE oil production reaches a target of 5 mbd. That exceeds any historical level and reflects the expected normalisation of OPEC+ quotas and the ramp-up of previously idle ADNOC capacity. For reference, output already climbed to a near-record 3.8 mbd in June and July 2026 (+25.9% and +20.3% YoY respectively), after sitting at 2.0 mbd between March and May.
Non-oil GDP is set to grow 4.9% in 2027 — a moderate pickup after 2026. The CBUAE's macro scenario rests on financial-system resilience, large fiscal buffers and the ongoing diversification of the UAE economy.
Why 2026 is only 1.6%
The main reason is a temporary oil-output dip in Q1. Production averaged just 2.0 mbd between March and May 2026 (vs 2.9 mbd a year earlier), so hydrocarbon activity contracted 3.5% in the first quarter. Meanwhile the non-oil economy grew 4.8% in Q1 2026, led by financial and insurance activities (+17.3%, contributing 2.4 pp to non-oil growth) and construction (+8.1%, 1.0 pp). Overall Q1 2026 growth: +3.0%.
The output rebound in Q2 and early Q3 (to 3.8 mbd in June and July) partly offset the spring dip but could not lift the full-year figure above 1.6%.
Inflation stays low
The CBUAE projects inflation at 2.4% in 2026 and 1.9% in 2027 — below the global average (the IMF projects 4.7% in 2026 and 3.9% in 2027). Price stability is supported by contained housing costs, regulated prices for staple foods and consumer-price monitoring. The CBUAE Base Rate holds at 3.65%, in line with the Federal Funds target range of 3.50–3.75%.
What this means for UAE businesses
The practical read-out for companies and investors:
- A clear inflation band. 2.4% then 1.9% over two years means predictable rent, salary and operating-cost planning.
- Finance and insurance are the non-oil engine. The sector grew 17.3% in Q1 2026 and lifted its share of non-oil GDP from 14.1% to 15.8%. A supportive backdrop for fintech, insurance and investment platforms.
- The construction cycle remains alive. +8.1% in Q1 2026 — a positive signal for contractors, developers and equipment suppliers.
- The 2027 oil step-up implies stronger FX inflows, fiscal buffers and additional sovereign-fund capital — a cue for medium-term capex planning.
- External demand will flow via CEPA trade agreements. Non-oil exports are a key growth channel in 2027 alongside oil.
The banking sector as a tailwind
UAE banking assets reached AED 5.6 trillion at the end of Q2 2026 (+12.5% YoY); loans grew 18.1% and deposits 14.0%. Capital adequacy stood at 17.0% and the net NPL ratio at a historically low 1.3%. For business, that translates into working credit channels and resilient liquidity — a precondition for delivering the 2027 growth outlook.
This article is based on the Central Bank of the UAE's Quarterly Economic Review (September 2026) and is for information only. It is not investment or tax advice; make investment decisions with a qualified adviser based on your own situation.
