The World Bank published the latest edition of the Gulf Economic Update (GEU)- Fall 2025 today, which predicts the UAE economy to expand by 4.8 percent.
The reports were titled as “The Gulf’s Digital Transformation: A Powerful Engine for Economic Diversification,” affirmed that the UAE is still realizing high and well-rounded growth, and balance across oil and non-oil sectors.
The real GDP is projected to increase by 4.8 percent, and the nation is ahead of the curve in export base diversification in 2025.
The report further estimated economic growth of Saudi Arabia at 3.8 percent, Bahrain at 3.5 percent, Oman- 3.1 percent, Qatar- 2.8 percent, and Kuwait- 2.7 percent.
This report points to three key pillars, including the changes in the indicators of economic diversification over the last decades, monitoring macroeconomic trends, and emphasizing digital transformation.
The report indicated the outcomes of the economic diversification process in GCC countries in the past decades, showing moderate results, some of which these encouraging outcomes, which have been noted in recent years.
It also pointed to the accelerated pace of digital transformation in the Gulf and the acceleration of the adoption of artificial intelligence, pointing out that all GCC countries have the most advanced telecommunications systems, with more than 90 percent 5G penetration, as well as inexpensive high-speed internet.
Data centers and high-performance computing are growing into large investments, and the UAE and Saudi Arabia are becoming regional and global leaders in AI readiness.
This development is facilitated through facilitative ecosystems such as project and innovation financing and facilities, as well as the government adopting generative AI applications.
World Bank Division Director for the Gulf Cooperation Council, Safaa El Tayeb El Kogali, stated that diversification and digital transformation are no longer an option, but a need to become economically stable and prosperous in the long term.
She noted that the digital leap made by GCC countries is impressive, including that an efficient infrastructure, rising computing power, and rising AI-related skills and competencies can put the region at the forefront of leadership and innovation, only in case environmental and labor-market issues are tackled proactively.
The report also emphasized that women’s enrollment in STEM in the Gulf is higher than the global average, which contributes to the digital competitiveness of the region.
It suggested that small and medium-sized enterprises (SMEs) should be assisted in switching to AI to boost innovation and introduce training programmes to update the workforce and prevent labour-market shortages to get the most out of diversification and digital transformation.
