The UAE is expected to overtake the world economy by 2026 after Standard Chartered raised its forecast for the country’s GDP growth to 5 percent.
The development reflects the UAE’s strong trade performance, strong non-oil economy and growing role as a global connector between fragmented trade flows.
The revised outlook puts the UAE ahead of global growth of 3.4 percent next year, according to Standard Chartered Global Research.
The UAE’s growth outlook has improved
In its latest Global Focus report, Standard Chartered Global Research raised its 2026 GDP growth forecast for the UAE to 5 percent, from an earlier estimate of 4 percent.
The bank is keeping a strong outlook on the dynamics of global supply chains and an improving domestic market, which is expected to offset the impact of soft oil prices.
Strong non-oil activity, supported by favorable demographics and a thriving construction sector, is forecast to grow by 4.5 percent by 2026.
Foreign trade is estimated to reach $1tn
Amid a highly fragmented global trade environment, Standard Chartered forecasts the value of the UAE’s foreign trade to reach the $1tn mark by 2026. The UAE–Asia trade corridor is expected to cover one-third of that volume, underscoring the country’s growing role in east-west trade.
Rola Abu Manneh, CEO of the UAE, Middle East and Pakistan at Standard Chartered, said: “The UAE remains prominent on the world map, as the nation is expected to remain on track to deliver two consecutive years of growth by 2026. prosperous within them.”
The UAE is also expected to maintain both fiscal and current account surpluses, supported by deep domestic liquidity. Deposit growth continues to outpace private sector credit growth, which was 9.1 percent year-on-year in mid-2025.
As a result, the UAE has the lowest loan-to-deposit ratio in the Gulf Cooperation Council, giving local banks the opportunity to pursue cross-border lending opportunities. Standard Chartered highlighted Saudi Arabia as a key market, where interbank interest rates remain unchanged.
Global perspective: US, China and Europe
Beyond the UAE, Standard Chartered Global Research raised its US growth forecast for 2026 to 2.3 percent from 1.7 percent, citing strong business investment, corporate tax cuts and accelerating adoption of artificial intelligence.
The bank expects the US labor market to begin to recover in the second half of 2026 as firms adjust to higher wages amid strong domestic demand.
China’s growth forecast for 2026 was raised again to 4.6 percent from 4.3 percent, and 2025 growth is on track to reach 4.9 percent.
Although export growth is expected to slow in 2026, it should remain supported by the recent US-China trade agreement and continued diversification of export markets, despite high trade risks ahead of the US mid-term elections.
The euro area’s growth forecast for 2026 rose to 1.1 percent from 1.0 percent, although prospects remained muted due to trade pressures and uneven performance across member economies.
In Asia, export-led growth was better than expected in 2025, but Standard Chartered expects a moderate boost in 2026 as export frontloading eases and political uncertainty weighs on other markets.
Risks and high potential
Madhur Jha, Global Economist and Head, Thematic Research, said: “While the growth outlook for 2026 is positive, it comes with high risks from multiple sources.
“Not all risks are to the downside. AI-related productivity gains may begin to filter in sooner than expected, boosting growth not only in the US and China but globally.
“Although tariffs are unlikely to be reduced further, global trade growth is likely to remain strong as the diversity of trading partners allows other economies to reap a greater share of the economic benefits associated with trade.”
