Non-oil economy now sets the pace
New figures from the Federal Competitiveness and Statistics Centre show non-oil GDP grew 4.8% in Q1 2026. Its share of total output rose to 79.4%, up from 78% in 2025. Real GDP expanded 3% year-on-year to AED485 billion at constant prices. This shift signals that growth is now structurally anchored in services and knowledge-based activities rather than hydrocarbons.
Officials frame the data as evidence that economic policy is delivering. Mohammad bin Abdullah Al Gergawi, Minister of Cabinet Affairs, said the numbers show the government system is turning long-term strategy into tangible economic outcomes. He added that the results are strengthening the UAE’s position in global competitiveness and future readiness. His comments tie the performance directly to the “We the UAE 2031” vision, which targets doubling the economy to AED3 trillion by 2031.
The sector detail is striking. Financial and insurance activities were the single strongest driver, expanding 17.3% year-on-year. They contributed 2.44 percentage points to overall GDP growth in the quarter. Construction grew 8.1%, adding 1.04 percentage points to headline growth. Human health and social work activities rose 7.7%, information and communication 5.9%, and real estate 4.8%. Together, these figures point to broad-based non-oil expansion across high-value-added segments.
Professional, scientific and technical activities, alongside administrative and support services, grew 4.9%. Wholesale and retail trade expanded 2.6%. These sectors show that the post-pandemic domestic demand cycle is intact even as the region absorbs geopolitical shocks. The authorities highlight that the impact of regional tensions in the first quarter remained confined to a limited number of activities and did not derail the overall growth path.
Diversification, trade policy and investor signalling
For investors focused on UAE non-oil growth, the Q1 data provide a clearer read-through on medium-term direction. Abdulla bin Touq Al Marri, Minister of Economy and Tourism, said the results confirm the robustness of national economic performance. He added that they demonstrate the economy’s ability to sustain growth and competitiveness at both regional and global levels. He emphasised that non-oil sectors continue to lead, underpinning sustainable expansion and reinforcing the UAE’s role as a global hub for business and investment.
The numbers also validate policy choices around openness and trade. The strong non-oil showing aligns with the UAE’s expanding foreign trade. This is supported by its network of Comprehensive Economic Partnership Agreements (CEPAs), which are opening new markets for non-oil exports and strengthening manufacturing, trade and logistics. Dr Thani bin Ahmed Al Zeyoudi, Minister of Foreign Trade, said the Q1 GDP outcome confirms the success of the strategy to deepen trade and investment partnerships. He argued this approach is turning the UAE into a global gateway for world trade and increasing its appeal to high-quality investment.
For capital allocators, the composition of growth suggests that earnings leverage will sit in financial services, construction, health, ICT and professional services over the coming cycle. These sectors sit at the heart of the “We the UAE 2031” vision, which seeks a more diversified and sustainable model able to adapt to global shifts while maintaining a stable growth path. They also tend to be less exposed to hydrocarbon price volatility, which can help smooth macro and fiscal performance.
As a result, Q1 2026 data on UAE non-oil growth offer a constructive signal: diversification is translating into measurable output gains and deeper sectoral breadth. Investors and policymakers should now watch how momentum in financial services, construction and trade holds into the second half of 2026, and how upcoming CEPA deals and 2031-linked reforms further reweight the UAE’s growth story towards these non-oil engines.
