UAE economy edges up 0.4% in H1, hit by spring travel slump

The UAE economy grew a modest 0.4% over the first six months of 2026, official figures show, with non-oil gains offsetting a steep spring contraction.

In constant-price terms, the economy was worth 961.9 billion dirhams, or $262 billion, over the period. The Federal Competitiveness and Statistics Centre (FCSC) released the figures on Friday, according to the state news agency WAM.

Non-oil activity rose 1.8% over that period. Non-oil sectors now account for 79.2% of output, against 78.1% a year before. Oil makes up the other 20.8%.

Second quarter shrinks

However, the half-year figure hides a sharp slowdown in the spring. In the second quarter, real GDP fell 2.1% on the year to 476.9 billion dirhams.

Non-oil output also slipped 1.1% in that quarter. According to the FCSC, regional developments and travel disruption hit several sectors, especially tourism, transport and trade.

Even so, the statistics centre said the data confirmed the need to keep diversifying the UAE economy. In its words, a larger non-oil share helps “support sustainable growth” and makes the country more resilient.

Finance leads UAE economy growth

Among the big sectors, finance and insurance led the way in the first half with a 14.8% rise. Information and communication followed with growth of 7.3%.

Meanwhile, health and social work expanded 6% and construction grew 5.1%. Government activities rose 3.6%, while real estate added 2.3%.

Trade remained the largest part of the non-oil economy, with a share of 16.2%. Next came finance and insurance with 15.2%. Construction held 13.1%, manufacturing 11.8% and property 7.9%.

In addition, the FCSC said the spread of growth across trade, finance, building, industry and property showed a broader economic base. It added that more growth drivers help keep expansion balanced across sectors.

IMF expects slower year

Back in July, the International Monetary Fund credited solid policy buffers and a quick response for helping the country ride out regional turmoil. Even so, it forecast that this year’s growth would fall a little short of last year’s pace.

The fund pointed to tourism, transport, trade and property as the sectors most exposed to the uncertain outlook. Indeed, the second-quarter figures now show those pressures at work.

The first quarter had looked much stronger. Back then, the UAE economy grew 3%, and non-oil activity rose 4.8%, earlier official data showed. Those months covered one month of the Iran war, during which Iranian missiles and drones hit the country daily. At the time, Cabinet Affairs Minister Mohammed Al Gergawi said non-oil growth was “not an isolated figure” but the result of joined-up government policies. Abu Dhabi’s ADGM financial centre also reported a 57% rise in assets under management in that quarter.

Trade has also offered support. Non-oil exports jumped 23.9% in the first half to 452.8 billion dirhams, government data show, helped by the country’s network of Comprehensive Economic Partnership Agreements.

For now, the latest numbers remain preliminary. A complete revision of GDP statistics is under way, led by the FCSC with its partners. Updated figures will follow once officials sign off on the results in the first three months of 2027.