Key Points
- UAE real GDP fell 2.1% year-on-year in the second quarter of 2026, official estimates show
- First-half GDP still rose 0.4% to 961.9 billion dirhams, with non-oil activity up 1.8%
- The quarterly contraction tests the diversification drive that now accounts for 79.2% of output
The latest:
Real GDP in the United Arab Emirates contracted 2.1% year-on-year in the second quarter of 2026, falling to 476.9 billion dirhams, according to preliminary estimates from the Federal Competitiveness and Statistics Centre. Non-oil activity also slipped 1.1% over the quarter, with the centre attributing the weakness in tourism, transport and trade to regional conditions. The half-year picture remained positive, at 961.9 billion dirhams.
Details:
- The headline figure: Real GDP at constant prices reached 961.9 billion dirhams in the first half of 2026, up 0.4% from the same period of 2025, the Federal Competitiveness and Statistics Centre said. The figure covers both oil and non-oil output and is measured against a 2025 base period.
- The non-oil split: Non-oil GDP grew 1.8% in the first half, outpacing the overall economy and lifting its share of national output to 79.2%, against 78.1% a year earlier. Oil activities accounted for the remaining 20.8%, according to the centre’s data.
- The quarterly reversal: The second quarter broke the pattern. Overall GDP fell 2.1% and non-oil activity turned negative at minus 1.1%, with the centre naming tourism, transport and trade as the sectors most affected by regional conditions. It did not quantify the contraction in any individual sector.
- Fastest growers: Financial and insurance activities posted the strongest first-half growth at 14.8%, followed by information and communications at 7.3%, health and social services at 6%, construction at 5.1%, government activities at 3.6% and real estate at 2.3%.
- Biggest contributors: Trade was the largest single contributor to non-oil GDP in the first half at 16.2%, followed by financial and insurance activities at 15.2%, construction at 13.1%, manufacturing at 11.8% and real estate at 7.9%.
- Status of the data: The centre described both the first-half and second-quarter results as preliminary estimates based on currently approved methodologies and statistical series, meaning the figures are open to revision before any final national series is published.
- The revision underway: A comprehensive national review of GDP is being carried out by the centre with partners in the national statistical system. The updated national series will be issued only after the review results are approved, during the first quarter of 2027.
- The official framing: The centre argued the results confirm a diversified base and multiple growth drivers across trade, finance, insurance, construction, manufacturing and real estate, and said they underline the need to keep widening the non-oil share to support growth sustainability and competitiveness.
Between the lines:
The two readings point in opposite directions, and the gap is the story. A 1.8% non-oil gain over six months alongside a 1.1% non-oil decline in the second quarter implies the first quarter carried the half-year result. Because the sectors the centre flagged — tourism, transport, trade — sit inside the non-oil bloc that now makes up 79.2% of output, diversification does not insulate the economy from regional shocks.
What’s next
Third-quarter estimates will show whether the non-oil contraction extended beyond one quarter. The updated national GDP series, due after the comprehensive review is approved in the first quarter of 2027, could revise all 2026 figures.
