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UAE economy grows 0.4% in first half of 2026 as second quarter contracts

1 min read

The Abu Dhabi skyline along the Corniche with the sea in the foreground on a clear morning Economy
The Abu Dhabi skyline along the Corniche with the sea in the foreground on a clear morning

Real GDP reached AED 961.9 billion in January to June, with non-oil activity at 79.2% of the economy; the second quarter fell 2.1% as the regional conflict hit tourism, transport and trade.

The UAE's real gross domestic product grew 0.4% year on year in the first half of 2026 to AED 961.9 billion, according to Federal Competitiveness and Statistics Centre (FCSC) figures reported by The National on 9 October.

Non-oil activities made up 79.2% of GDP and grew 1.8%. Trade contributed 16.2% of non-oil GDP, financial and insurance activities 15.2%, construction 13.1%, manufacturing 11.8% and real estate 7.9%. The fastest-growing sectors were financial and insurance activities (14.8%), information and communication (7.3%), health and social work (6%) and construction (5.1%).

The second quarter was weaker. Real GDP fell 2.1% year on year to AED 476.9 billion and non-oil activity contracted 1.1%, as tourism, transport and trade were affected by the conflict in the region. In 2025 the economy grew 6.2% to AED 1.9 trillion.

More recent indicators point to a recovery. The S&P Global UAE Purchasing Managers' Index stood at 55.3 in September, unchanged from August and above the 50 mark that separates growth from contraction. S&P said the reading was "another indication that the non-oil economy has moved past the midyear slowdown linked to the Middle East conflict". Companies also raised selling prices at the fastest pace in more than 15 years in response to higher costs.

For investors, the figures show the finance, technology and health sectors holding up while travel and trade took the hit. The third-quarter GDP release from the FCSC will show how far the rebound signalled by the PMI has gone.

Sources