At a glance
On 1 October 2026 the Central Bank of the UAE (CBUAE) published its Quarterly Economic Review for September 2026, with a data cut-off date of 11 August. In the update, the regulator raised its 2027 real GDP forecast from the previous 9.8% to 10.4%, while confirming its 2026 forecast at 1.6%. The main technical driver of the 2027 pickup is a ramp-up of oil production toward about 5 million barrels per day, combined with sustained non-oil growth of 4–5% a year. Inflation is set to stay below global averages, the Base Rate holds at 3.65%, and the banking sector keeps expanding its balance sheet.
What was revised
CBUAE now sees real GDP growth of 10.4% in 2027, up from the previous 9.8% estimate. The hydrocarbon sector carries most of that uplift: it is expected to expand by around 26.8% year-on-year as OPEC+ taper schedules normalise output toward roughly 5 mbd (for comparison: in June–July 2026 production ran at around 3.8 mbd, close to historical highs). The non-oil sector is projected to keep growing at about 4.9% in 2027. For 2026 the regulator confirms its 1.6% overall real GDP estimate — a combination of a restrained oil base and non-oil GDP growth of around 1.3% on average for the year.
What the Q1 2026 data shows
The revision builds on actual first-quarter 2026 figures. Real GDP rose 3.0% year-on-year, with non-oil GDP up 4.8%. The biggest contribution to non-oil growth came from financial and insurance activities: +17.3% YoY, adding 2.4 percentage points to the non-oil print. Construction came second: +8.1% YoY, adding 1.0 percentage point. These numbers show diversification is continuing — non-oil services are outpacing headline GDP. A full overview of the UAE economic outlook for 2026 covers the broader set of drivers — tourism, logistics, financial services, industrial AI and non-oil exports.
Inflation and monetary policy
CBUAE projects inflation at 2.4% in 2026 and 1.9% in 2027 — well below the global picture (global real GDP growth of 3.0% in 2026 and global inflation of 4.7% per the IMF July WEO Update, revised up by 0.3 pp from April). The regulator attributes this to contained housing costs, regulated staple food prices, and active monitoring of consumer prices. The CBUAE Base Rate stays at 3.65% through Q2 2026 and July, in step with the US Federal Reserve, which held the federal funds target range at 3.50–3.75% during 2026. The money market tracks the policy anchor closely: DONIA averages around 3 basis points above the Base Rate.
Banks, insurance and equity markets
By the end of Q2 2026 UAE banking sector assets reached AED 5.6 trillion (+12.5% YoY). The loan book expanded by 18.1% year-on-year and deposits by 14.0%. Banks kept strong capital positions: the capital adequacy ratio stood at 17.0%, while net non-performing loans eased to 1.3% — asset quality is improving. The insurance sector kept growing: H1 2026 gross written premiums were up 11.0% YoY, technical provisions +6.8% and equity +15.6%. On the equity side the ADX General Index was at 9,804 points with market capitalisation of AED 2.9 trillion, and the DFM General Index closed at 5,956 (+4.4% YoY). Sovereign credit default swap spreads for Abu Dhabi and Dubai remained at comparatively low levels.
Policy support
CBUAE highlights three pillars of the positive outlook: its own Financial Institution Resilience Package, Dubai's AED 2.5 billion economic initiative, and continued federal- and emirate-level infrastructure spending. These measures add to sizeable fiscal buffers and strong macroeconomic fundamentals that the regulator calls the base for "sustained positive momentum" over the medium term.
What it means for business and expats
For companies planning to incorporate in the Emirates, the CBUAE forecast adds to the case for a stable macro environment: non-oil growth of 4–5% a year, inflation below 2.5%, and banks with excess capital (CAR 17.0%) and clean asset quality (net NPL 1.3%) — i.e. a predictable backdrop for opening corporate accounts and funding projects. For expats, it means continued low inflationary pressure on living costs and a stable Base Rate — UAE mortgage rates linked to EIBOR should hold their current trajectory. That said, a macro outlook does not replace individual tax planning: the UAE 9% corporate tax on profits above AED 375,000 and the qualifying free zone person exemption determine the real effective rate for a specific business — that calculation needs to be done before registration, not after.
Scale caveat
The 10.4% forecast for 2027 is a technical print driven mostly by the normalisation of oil production (from ~3.8 to ~5 mbd). For comparison, non-oil growth stays near 4.9% — closer to the organic rhythm of the economy outside the OPEC+ schedule effect. When assessing business prospects it is more informative to look at the non-oil component; the 10.4% figure should be read as an aggregate inflated by the low 2026 oil base.
Source
This article is based on the primary source — the Central Bank of the UAE Quarterly Economic Review, September 2026 (data cut-off: 11 August 2026). All figures in the text — GDP, inflation and Base Rate projections, and banking sector indicators — are taken from the Executive Summary of the official CBUAE PDF. Secondary verification was done against Khaleej Times (01.10.2026).
