ع
The Federal Competitiveness and Statistics Centre reported that the UAE real gross domestic product expanded 0.4 percent in the first half of 2026 to reach Dh961.9 billion as non-oil activities grew 1.8 percent and increased their share of the economy to 79.2 percent from 78.1 percent a year earlier. Financial and insurance services led major sectors with 14.8 percent growth while information and communication activities rose 7.3 percent, health and social work expanded 6 percent and construction advanced 5.1 percent. Trade contributed the largest share of non-oil GDP at 16.2 percent followed by financial and insurance activities at 15.2 percent according to the centre’s preliminary data.
The economy nevertheless contracted in the second quarter when real GDP fell 2.1 percent year-on-year to Dh476.9 billion and non-oil activities declined 1.1 percent. Regional developments and disruptions to travel weighed on tourism, transport and trade which together slowed the broader expansion that had been evident in the first quarter. The centre noted that the first-half and quarterly figures remain preliminary estimates based on current statistical methodologies.
Oil activities accounted for 20.8 percent of GDP in the first half while helping to cushion the quarterly weakness in non-oil sectors. Government activities grew 3.6 percent and real estate expanded 2.3 percent over the six-month period as diversification continued to reshape the economy’s drivers. The centre indicated that the rising contribution of non-oil sectors supports long-term competitiveness and resilience even amid external pressures.
EnterpriseAM highlighted related economic headwinds in its report on the UAE economy contracting in 2Q noting how the country lost its lead in the GCC projects market during the period. Kamco Invest data placed UAE project awards at USD 20.5 billion in the second quarter a 56.6 percent drop from the previous quarter while Saudi Arabia more than doubled its awards to reclaim the regional top spot. Seven of eight UAE project sectors recorded lower values than a year earlier though oil awards jumped to USD 11.5 billion from USD 230 million.
A Cooper Fitch index seen by EnterpriseAM showed hiring in the UAE contracted 4 percent quarter-on-quarter in the second quarter the first decline in more than four years as firms often halted offers at the final stage amid uncertainty. The UAE PMI fell to 50.8 in June its weakest in more than five years and the central bank lifted its 2026 inflation forecast to 2.3 percent on supply-chain strains. Regional contract awards across the GCC fell 25.4 percent quarter-on-quarter to USD 59.4 billion according to the same Kamco Invest update though they remained 30 percent above the prior-year level.
Adnoc has outlined plans to award USD 54.4 billion in contracts from 2026 through 2028 as part of a larger five-year capital program that allocates about 70 percent to upstream oil and gas. The longer-term GCC projects pipeline stands at around USD 2.1 trillion with the UAE representing 26.1 percent of planned work. Such commitments could help offset some of the quarterly slowdown in coming periods.
