GCC & UAE Economy & Market Update August 2026

The MENA M&A market remained resilient in H1 2026, recording 390 transactions worth $46.7 billion. Although deal volumes declined compared with H1 2025, transaction values strengthened significantly, with Q2 deal value reaching $25 billion, more than double the prior-year period. Large transactions above $500 million accounted for a substantial share of activity, indicating a shift toward strategic, high-conviction investments. The UAE and Saudi Arabia remained the region’s leading outbound investors, supported by major cross-border transactions in aviation, chemicals, gaming, and technology.

The UAE real estate market continued to demonstrate resilience, with Dubai recording approximately AED 108.1 billion in total real estate transactions during Q2 2026. Residential transactions reached AED 83.88 billion, while off-plan properties continued to dominate activity. Despite a Y-o-Y decline in transaction volumes, Q2 remained the third-highest Q2 on record, while July residential sales reached AED 25.95 billion across 12,748 transactions. The luxury segment was also strong, with 320 homes priced above $10 million sold during H1 2026, representing a 23% year-on-year increase.

From a macroeconomic perspective, the UAE recorded strong real GDP growth of 6.2% in 2025, supported by 6.8% growth in non-hydrocarbon activities. However, the CBUAE revised its 2026 GDP growth forecast to 1.7%, reflecting external and regional headwinds affecting hydrocarbon production, tourism, logistics and investment flows. Despite the weaker near-term outlook, inflation is expected to remain contained at around 1.8%, while strong fiscal fundamentals, policy support and infrastructure spending continue to provide buffers to the economy.

The UAE also maintained a leading position in the regional startup and investment ecosystem, attracting $591 million across 37 VC deals in Q2 2026, equivalent to 74% of MENA's Q2 funding. Fintech remained the leading sector, followed by logistics and proptech, although investors have become increasingly selective and focused on businesses with clearer paths to scale. Broader investment prospects are also supported by continued capital-market development and the GCC-UK Free Trade Agreement, which is expected to strengthen cross-border investment and transaction opportunities across financial services, technology, and infrastructure.