Economic policy in the UAE continues to centre on building resilience as the country progresses with its diversification agenda in the first half of 2026. A PwC Middle East assessment published by Khaleej Times in January highlighted continued advancement across trade agreements AI infrastructure and sector reforms throughout 2025 even as external conditions featured softer oil prices tighter finance and geoeconomic competition. Oxford Economics data places GCC real GDP growth at 4.4 percent this year accelerating from 4 percent in 2025 while the assessment noted that federal corporate income tax has provided a stronger non-oil revenue base reducing sensitivity to hydrocarbon fluctuations.
The UAE has prioritised broader and more diverse trade relationships to navigate fragmented global dynamics. By the end of 2025 the country had activated Comprehensive Economic Partnership Agreements with more than two dozen partners across Asia Africa and Europe producing double-digit growth in non-oil trade with India Türkiye and Indonesia according to the PwC assessment. These pacts extend beyond tariffs to cover services investment digital trade and rules of origin that support domestic logistics manufacturing and export goals. Engagement with Southeast Asian nations through deals with Indonesia Cambodia and negotiations involving Vietnam and Malaysia has been reinforced by two-way investments in ports energy and industrial assets the report stated.
Securing access to critical minerals and resilient supply chains forms another core theme. Rising global demand for lithium cobalt copper and rare earth elements has exposed concentrated supply chains to geopolitical risks prompting the UAE to pursue upstream partnerships across Africa and Asia. ADQ has established a joint venture with Orion Resource Partners to develop a platform for metals and mining investments while Abu Dhabi targets trading processing and manufacturing opportunities aligned with national industrial strategy. A framework signed with the United States in February 2026 seeks to accelerate secure supplies of these materials for defence and advanced technologies the Ministry of Investment announced and an IMF assessment indicated such moves could support the UAE’s role as a connector in global value chains.
Accelerating AI deployment has shifted from infrastructure building to practical application across key sectors. The UAE now ranks among global leaders in planned GPU clusters with the first phase of Stargate UAE and expansions by Khazna Data Centres scheduled to add substantial capacity during 2026 the PwC assessment found. Financial services logistics transport energy and retail are moving from pilot projects to operational AI systems including sector-specific models and automation platforms. Regulatory developments on data governance model risk and incident reporting are expected to provide clarity for adoption in regulated industries while data sovereignty rules will expand localisation for sensitive datasets in government healthcare and finance.
Labour market measures are evolving to manage workforce transitions as AI adoption gathers pace. Short modular training programmes and micro-credentials are scaling with standardisation to match employer demands in data analytics cybersecurity and AI-assisted processes according to the January assessment. Partnerships with technology firms such as Microsoft and IBM alongside the Dubai Future Foundation’s One Million AI Prompters initiative are expanding applied learning while the Emirati Smart Human Resource Platform integrates demand skills and placement data to direct reskilling efforts. Policy now stresses enabling mobility and mid-career shifts into higher-value private sector roles rather than preserving existing positions the report noted.
Fiscal policy is reinforcing resilience in a lower oil price environment through growing non-oil revenues. Introduction of the federal corporate income tax is projected to generate billions of dirhams annually and could account for up to 2 to 3 percent of GDP once fully implemented an IMF report noted. This buffer allows more disciplined spending focused on AI digital platforms advanced manufacturing and logistics where public funds can attract private capital. Government debt remains low by international standards while asset monetisation public-private partnerships and improved tax compliance continue to support infrastructure delivery without broad expenditure increases the PwC partner stated.
