The UAE’s economy grew 3 per cent on an annual basis in the first three months of 2026 to reach Dh485 billion as the country’s non-oil sector expanded.
The Emirates’ non-oil gross domestic product grew by 4.8 per cent, raising its contribution to 79.4 per cent of the national economy, reflecting the continued strength of non-oil economic activities, the UAE Government Media Office said on Tuesday, citing data from the Federal Competitiveness and Statistics Centre.
The quarter included one month of the Iranian war, at a time when the UAE was being targeted daily by Iranian missiles and drones, sparking disruption to the local economy.
“The growth led by the non-oil economy … is not an isolated figure, but the outcome of integrated government policies and initiatives working as one system towards one goal: consolidating the UAE’s standing as a global leader in competitiveness, excellence and future readiness,” said Mohammad Al Gergawi, Minister of Cabinet Affairs.
The results also demonstrate the resilience of the national economy, as this growth was achieved despite the regional challenges witnessed during the first quarter of the year, the media office said. It added that the impact of the regional events was confined to a limited number of activities and did not affect the overall trajectory of economic growth.
Key growth sectors
Financial and insurance activities led the growth in the first quarter at 17.3 per cent, followed by construction at 8.1 per cent and human health and social work activities at 7.7 per cent, according to the government data.
Information and communication activities grew by 5.9 per cent and professional, scientific and technical activities together with administrative and support service activities grew by 4.9 per cent, “reflecting continued momentum across vital, high-value-added economic activities”.
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The UAE’s two financial centres achieved strong growth in the first half of this year. Abu Dhabi’s ADGM posted a 57 per cent increase in assets under management in the three-month period amid continued flow of capital, it said in May.
Whereas, number of companies at Dubai International Financial Centre grew at a record pace in the first half of as the financial hub continued to attract banks, wealth and asset managers, and hedge funds from around the globe, despite despite uncertainty over the Iran war.
The data also showed real estate activities growing by 4.8 per cent during the quarter, public administration, defence and compulsory social security by 4.5 per cent, and wholesale and retail trade by 2.6 per cent.
Defying war challenges
The Arab world’s second-largest economy continues to grow despite the Iran conflict and amid a push towards diversification as well as the signing of new Comprehensive Economic Partnership Agreements (Cepa).
Strong performance of the country’s foreign trade, backed by Cepa deals, has opened new markets for national non-oil exports, the media office said, adding that it has strengthened the performance of manufacturing, trade and logistics activities.
Non-oil exports grew by 23.9 per cent during the first half of 2026 to reach Dh452.8 billion, recording the highest growth rate among the components of the UAE’s foreign trade, government data shows.
This “confirms the pivotal role of trade openness in stimulating domestic production and enhancing the competitiveness of the industrial and services sectors as among the country’s most important drivers of economic diversification”, said Dr Thani Al Zeyoudi, Minister of Foreign Trade. He added that the first-quarter result boosts the UAE’s appeal to high-quality investors.
The Iran war has tipped the region into one of its worst geopolitical crises in decades. The conflict, which began on February 28 when Israel and the US bombed Iran, led Tehran to attack its Arab neighbours and close the Strait of Hormuz.
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However, despite more than four months of disruption, economies in the Gulf have maintained growth momentum, albeit at a slower rate, the International Monetary Fund said in June.
The UAE economy is set to rebound in the second half of the year despite the regional war, amid an exports recovery following its exit from Opec, the IMF said last month.
In May, ratings agency Fitch retained its long-term issuer default rating of AA- for the UAE, stating that oil export revenue, due to higher crude prices, is expected to remain strong despite the conflict and is to offset any immediate negative impact.
The Emirates also has abundant fiscal and external buffers, and is being anchored by Abu Dhabi’s sovereign net foreign assets, which are estimated at about 164 per cent of UAE gross domestic product in 2025 – among the highest of Fitch-rated sovereigns, the rating agency said at the time.
Minister of Economy and Tourism Abdulla bin Touq said the first-quarter growth reflects the robustness of national economic performance and its ability to sustain growth.
“This performance also reflects the country’s vision of transitioning towards a more diversified and sustainable economic model, capable of adapting to global developments and sustaining its growth trajectory, in line with the objectives of the ‘We the UAE 2031’ Vision, which seeks to double the size of the national economy to Dh3 trillion by 2031,” he said.
Key statisticsGDP reached Dh485 billion, growing 3 per cent compared with Q1 2025.Non-oil GDP grew by 4.8 per cent, raising its contribution to 79.4 per cent of the national economy.Financial and insurance activities were the fastest growing at 17.3 per cent, followed by construction at 8.1 per cent.The financial sector alone contributed 2.44 percentage points of total non-oil growth.Non-oil exports recorded Dh452.8 billion, growing 23.9 per cent during the first half of 2026.
