The UAE economy is expected to significantly outperform global growth in 2026, following an upward revision to its GDP forecast by Standard Chartered Global Research (SC Global Research).
The bank has raised its UAE growth projection to 5.0%, up from 4.0%, well above the anticipated 3.4% global growth rate.
According to SC Global Research’s latest Global Focus report, the UAE’s improving outlook is being driven by resilient domestic demand and the country’s ability to capitalise on shifting global supply chains: factors that are expected to mitigate the impact of lower oil prices.
Amid increasing fragmentation in global trade, the UAE’s total foreign trade is forecast to surpass $1 trillion by 2026, with the UAE–Asia corridor accounting for nearly one-third of total trade volumes.
Non-oil economic activity is projected to expand by 4.5% in 2026, supported by favourable demographics, continued investment inflows and a buoyant real estate sector.
Twin Surpluses Support Strong Liquidity
Rola Abu Manneh, CEO for UAE, Middle East and Pakistan at Standard Chartered, said the UAE continues to stand out globally, with economic growth expected to remain at potential levels for a second consecutive year.
Abu Manneh highlighted that the projected $1 trillion in foreign trade reinforces the UAE’s growing role as a global trade and logistics hub, successfully adapting to evolving global commerce patterns.
The country is also expected to maintain twin fiscal and current account surpluses, underpinned by strong domestic liquidity. Deposit growth continues to outpace private-sector credit expansion, keeping the UAE’s loan-to-deposit ratio the lowest in the GCC.
This strong balance-sheet position provides local banks with capacity to pursue cross-border lending opportunities, particularly in Saudi Arabia, where interbank rates remain elevated.
Global Growth Outlook Revised Higher
SC Global Research has also upgraded its U.S. growth forecast for 2026 to 2.3%, from 1.7%, citing stronger business investment and consumer spending supported by corporate tax cuts and accelerating AI adoption.
The U.S. labour market is expected to begin recovering in the second half of 2026 as financial conditions ease.
China’s 2026 growth outlook has been revised up to 4.6% from 4.3%, with exports proving more resilient than expected despite ongoing trade tensions. Although export momentum is likely to moderate, diversified markets and the U.S.–China trade truce should help cushion the slowdown.
In contrast, risks remain elevated due to rising U.S. political uncertainty ahead of midterm elections. The euro area’s growth forecast has edged up slightly to 1.1% for 2026, driven mainly by carryover effects, though structural challenges including U.S. tariffs, Chinese competition and uneven regional performance persist.
Across Asia, export-driven economies showed resilience in 2025 due to front-loaded shipments to the U.S., but this support is expected to fade in 2026. Political uncertainty in countries such as Thailand and the Philippines may also weigh on regional growth.
Benign Outlook with Elevated Risks
Madhur Jha, Global Economist and Head of Thematic Research at Standard Chartered, noted that while the global outlook for 2026 remains broadly benign, downside risks remain elevated due to geopolitical tensions, elections and shifting global alliances.
On the upside, faster-than-expected productivity gains from AI adoption could provide a meaningful boost to global growth, while trade diversification may help sustain trade flows despite persistent tariff barriers.
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