GCC & UAE :  Economy &  Market Update December 2025

The UAE continues to strengthen its position as a regional and global investment hub, supported by resilient economic growth, strong non-oil sector expansion, and a clear long-term policy vision. Real GDP growth expected at 4.2% in second half -2025 was driven primarily by manufacturing, financial services, construction, and real estate, prompting an upward revision of full-year growth expectations. Alongside this, the National Investment Strategy 2031 signals a decisive push toward capital inflows, diversification, and sustainable sectors, targeting a significant increase in foreign direct investment and its contribution to GDP. The UAE’s growing prominence in digital trading and financial activity further reinforces its role as a forward-looking, innovation-led economy.

Deal activity across MENA reflects a market that remains fundamentally active but increasingly selective. While M&A volumes and values in the UAE and wider GCC remain robust—led by large, strategic transactions in industrials, energy, and petrochemicals—startup funding has slowed as investors rebalance after an unusually strong cycle.

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