The United Arab Emirates (UAE) has achieved a significant milestone in its economic journey, recording a 5.7% growth in UAE non-oil GDP growth during the first half of 2025. This impressive performance underscores the country’s successful transition from an oil-dependent economy to one driven by diverse, resilient, and innovative sectors. Non-oil activities now account for 77.5% of the UAE’s real GDP, marking a record high and highlighting the effectiveness of its long-term diversification strategy.
A New Era of Economic Diversification
The UAE’s economic transformation is the result of deliberate government policies and strategic investments aimed at building a sustainable and knowledge-based economy. Over the past decade, the government has prioritized sectors such as technology, finance, tourism, manufacturing, and renewable energy, reducing reliance on hydrocarbons. The latest data from the Ministry of Economy and Tourism and the Federal Competitiveness and Statistics Centre (FCSC) shows that non-oil GDP reached AED 352 billion (approximately $96 billion) in the first quarter of 2025, reflecting a 5.3% year-on-year increase.
This growth is not just a one-time surge but part of a consistent trend. The contribution of non-oil activities to real GDP has steadily risen, from 71.3% in 2020 to the current record level. The government’s “We the Emirates 2031” vision, which aims to grow the country’s GDP to AED 3 trillion ($816.7 billion) by 2031, is now well on track thanks to this sustained momentum.
Leading Sectors Driving Growth
Several key sectors have led the charge in the UAE’s non-oil economic expansion. Manufacturing topped the list with a 7.7% growth rate in the first quarter of 2025, followed closely by finance and insurance, and construction, both growing by 7%. Real estate activities expanded by 6.6%, while trade activities grew by 3%. These sectors not only contributed significantly to GDP but also created new jobs, attracted foreign investment, and enhanced the country’s global competitiveness.
Trade remains the largest contributor to non-oil GDP, accounting for 15.6%, followed by finance and insurance (14.6%), manufacturing (13.4%), construction (12.0%), and real estate (7.4%). The robust growth in trade is partly due to the UAE’s strategic location as a global logistics and trade hub, supported by world-class infrastructure and business-friendly policies.
Policy Reforms and Global Confidence
The UAE’s economic success is also rooted in its commitment to regulatory reforms and transparency. The government has introduced several new economic laws and regulatory policies in 2025, covering consumer protection, ecotourism, food security, air transport, and sustainability. These reforms have strengthened the business environment, boosted investor confidence, and positioned the UAE as a global model for advanced economic policies.
Abdullah bin Touq Al Marri, Minister of Economy and Tourism, emphasized that the strong performance reflects both investor trust and the confidence of the international community in the UAE’s business environment. He noted that the milestone non-oil contribution affirms the UAE’s success in implementing its diversification strategy and its ability to attract capital and talent from around the world.
Implications for the Future
The UAE’s achievement in non-oil GDP growth is more than just a statistical milestone; it is a testament to the country’s resilience, adaptability, and forward-thinking leadership. By focusing on innovation, investment, and global competitiveness, the UAE has created a platform for long-term value creation and sustainable development.
As the world economy faces uncertainty, the UAE’s diversified model offers a blueprint for other nations seeking to reduce their dependence on natural resources and build resilient, knowledge-driven economies. The country’s continued growth in non-oil sectors will not only support its own prosperity but also contribute to regional and global economic stability.
In summary, the UAE’s 5.7% non-oil GDP growth in the first half of 2025, with non-oil activities now accounting for 77.5% of real GDP, is a landmark achievement that highlights the success of its economic diversification efforts. This progress is the result of strategic investments, policy reforms, and a commitment to innovation, positioning the UAE as a leading global business hub and a model for sustainable economic development.
