UAE Economy Shows Significant Shift as Non-Oil Sector Reaches Record-Breaking 77% Contribution

UAE's Economy Soars in Q1 2025 with Non-Oil Sector Leading the Way

UAE Economy Shows Significant Shift as Non-Oil Sector Reaches Record-Breaking 77% Contribution

The United Arab Emirates (UAE) have experienced exceptional economic growth in the first quarter of 2025, with the non-oil sector contributing a record-breaking 77.3% to the overall GDP. This impressive figure underscores the country's commitment to establishing a modern, advanced, and diversified economic model, driven by technology and innovation.

High-Performing Sectors (Q1 2025)

1. Tourism and Hospitality

The tourism sector continues to thrive, fuelled by international events such as Expo 2025 in Dubai, a strong return of business travellers, and a surge in the luxury segment. The hotel industry, restaurants, leisure parks, and retail trade showed double-digit growth. The UAE are positioning themselves as a global hub for tourism and leisure.

2. Trade

Trade remains a key growth driver. Leveraging its role as a logistics hub between East and West, the introduction of new free trade agreements, and the digitalisation of trade have provided additional momentum. The online and brick-and-mortar retail sectors are growing dynamically, propelled by the trend towards "Shopping as an Experience".

3. Financial Services

Dubai's financial sector continues to grow at an above-average rate, particularly through the expansion of FinTech, the introduction of new regulations for cryptocurrencies, and increasing demand for Islamic financial products. The UAE are consolidating their status as a financial hub in the Middle East.

4. Construction and Real Estate

Despite global crises, the construction industry shows resilience, driven by megaprojects like the Meydan One complex, new smart cities, and sustainable housing projects. The demand for real estate, both residential and commercial, remains high.

5. Transport and Logistics

The logistics sector benefits from investments in port infrastructure, air cargo, and digital supply chain solutions. The UAE are a central node in global freight traffic, which is reflected in high growth rates.

6. Information and Communication Technology (ICT)

The ICT sector is growing strongly through the expansion of 5G infrastructure, cloud services, and AI-driven solutions. The government actively supports the digital transformation in all sectors.

Contribution to the Economy

These sectors collectively contributed to the non-oil sector's share of the overall GDP rising to 77.3%. The UAE have thus achieved a significant milestone in their diversification strategy, reducing their dependency on oil revenues.

Central Success Factors

Attractive Conditions for Talent: Attractive conditions for international talent
Infrastructure Investments: Modern ports, airports, and digital networks
Political Stability and Reforms: Business-friendly laws, visa simplifications
International Events: World expos, sports mega-events, trade fairs

Conclusion

In Q1 2025, sectors such as tourism, trade, financial services, construction, logistics, and ICT drove the UAE's economic growth. These industries benefit from a wise diversification policy, global networking, and future-oriented investments. The 77.3% share of the non-oil sector underscores the success of the UAE on their path to a modern, globally oriented, and resilient economy.

Sources: UAE Federal Competitiveness and Statistics Centre, Dubai Economy, local economic reports (Q1 2025, as of September 2025).

Abdullah bin Touq Al Marri, Minister of Economy and Tourism, stated that the figures reflect the confidence of investors and the international community in the UAE's business and investment environment.
The UAE's GDP at the end of Q1 2025 was Dh455 billion.
The real estate activities grew by 6.6% in Q1 2025.
Manufacturing, finance, insurance, and construction sectors led the growth in Q1 2025.
Al Marri also said the figures reflect the success of the comprehensive development model adopted by the UAE.
The aim of the "We the UAE 2031" vision is to raise the country's GDP to Dh3 trillion by the next decade.
The finance and insurance sector ranked second in terms of contributing to non-oil GDP in Q1 2025.
The manufacturing, construction, and real estate sectors also showed significant growth in Q1 2025.
Hanan Mansour Ahli, the director of the Federal Competitiveness and Statistics Center, affirmed the UAE's GDP growth in Q1 2025 as a testament to the efficiency of the UAE's economic model.
The trade sector was the top performing sector in terms of contributing to non-oil GDP in Q1 2025.
The trade industry grew by 3.0% in Q1 2025.
The manufacturing sector grew 7.7% during January-March 2025, followed by the finance and insurance sector (7.0%), construction sector (7.0%), real estate activities (6.6%), and trade industry (3.0%).
The UAE's real GDP grew 3.9% in Q1 2025, led by non-oil sectors that grew 5.3%.
Among the economic activities that contributed most to non-oil GDP in Q1 2025, the trade sector ranked first, contributing 15.6%, followed by the finance and insurance sector (14.6%), manufacturing industries (13.4%), construction sector (12.0%), and real estate activities (7.4%).