IMF Staff Concludes Visit to United Arab Emirates

IMF News, July 17, 2026

Source details

Mission dates: July 7–16, 2026.
Statement date: July 17, 2026.
Press Release No.: 26/250.
Objective: Discuss recent economic and financial developments, the outlook, and the authorities' policy priorities, and to prepare the ground for the 2026 Article IV consultation.

The UAE economy has shown "remarkable resilience to the conflict in the Middle East," supported by:
- strong buffers;
- timely and well-targeted policy response including by the government and the CBUAE Financial Institution Resilience Package;
- rerouting of oil and other trade flows.
Growth and activity projections and drivers:
- Overall GDP: expected to be slightly lower in 2026 following robust expansion in 2025.
- Driver of 2026 slowdown: slowdown in non-hydrocarbon activity as heightened uncertainty weighed on tourism, transportation, trade, and real estate.
- Hydrocarbon growth: expected to pick up in the second half of 2026 as recovering oil exports and the ramp-up in production following the UAE's exit from OPEC more than offset conflict-related disruptions.
- 2027: overall growth is projected to rebound strongly as hydrocarbon production scales up and non-hydrocarbon activity recovers, supported by normalizing tourism and trade flows.
- Inflation: expected to edge up in 2026, reflecting the pass-through of higher global energy and food prices, before gradually easing over the medium term.
Geopolitical and trade considerations:
- Ongoing uncertainty about the duration and intensity of the conflict remains elevated.
- The on-and-off closure of the Strait of Hormuz is weighing on activity.
- Assumption noted: gradual normalization between the US and Iran underpins the projected rebound in the second half of the year.

Fiscal balance:
- General government fiscal balance: expected to remain in surplus in 2026.
- Factors supporting surplus: higher oil prices, conservative budgeting, high oil prices, frontloaded dividends, and expenditure-efficiency measures.
- Surplus projection: the surplus is projected to narrow in 2026.
- Targeted fiscal actions: targeted support to affected sectors and households and planned infrastructure projects will continue.
- Public debt: low general government debt preserves ample fiscal space to respond to a more severe or prolonged shock if needed.
External position:
- External balances: expected to remain in surplus, though moderating in 2026 before recovering over the medium term as disruptions to non-hydrocarbon trade ease and oil exports increase.
- International reserves: remain ample and continue to provide a comfortable level of import coverage.

Banking system:
- Banks remain well-capitalized and liquid.
- Capital buffers: well above required ratios.
- Liquidity: tightened since the beginning of the conflict but remains ample.
- Credit and deposits: continue to expand.
- Private sector credit growth: expected to moderate reflecting a slowdown in non-hydrocarbon activity.
- Banking sector exposure to real estate: described as contained.
Real estate activity:
- Real estate activity moderated in the first half of 2026 after several years of strong expansion.
- Impact: uneven across segments and locations.
- Prices: generally remained at or above their 2025 levels.
- Monitoring: evolving market conditions warrant continued monitoring.

Near-term policy stance:
- Economic policies should remain agile and continue to focus on maintaining economic and financial stability and mitigating the economic impact of the conflict.
- Responses should be proactive, well-targeted, and capable of being scaled up if downside risks materialize.
Structural priorities:
- Advance diversification and continued structural reforms to sustain growth.
- Deeper trade integration, supported by the Comprehensive Economic Partnership Agreements and National Programme to Strengthen Supply Chain Resilience, is recommended to reinforce non-oil growth and support resilience to external shocks.
- Sustained investment in technology and human capital to reinforce non-oil growth and resilience.

The IMF team expressed appreciation to the authorities and other stakeholders for their collaboration and the fruitful discussions.

IMF Staff Concludes Visit to United Arab Emirates — July 17, 2026