UAE non-oil sectors hit 79.2% of GDP as growth slows

Gross domestic product grew 0.4 percent to 961.9 billion dirhams, or $262 billion, in the first half of 2026, and the expansion was driven almost entirely by non-oil activities. Those activities rose 1.8 percent and now account for 79.2 percent of the economy, up from 78.1 percent a year earlier. Oil activities made up the remaining 20.8 percent, according to data from the Federal Competitiveness and Statistics Centre reported by the Emirates News Agency, or WAM.

For market watchers, the headline number conceals a more complicated quarterly picture. Real GDP contracted 2.1 percent year on year in the second quarter, when output reached 476.9 billion dirhams, and non-oil activity itself fell 1.1 percent in that period. Regional developments and travel disruptions hit tourism, transport and trade, the sectors most exposed to cross-border flows of visitors and goods. The first-half gain therefore reflects strong early-year momentum carrying the total, even as the quarter most affected by external shocks showed clear strain.

The sectoral breakdown offers the clearest signal of where capital and activity are concentrating. Financial and insurance activities posted the strongest growth among major economic segments in the first half, expanding 14.8 percent, followed by information and communication at 7.3 percent. Health and social work grew 6 percent, construction 5.1 percent, government activities 3.6 percent and real estate 2.3 percent. In terms of weight within non-oil GDP, trade remains the largest contributor at 16.2 percent, ahead of financial and insurance activities at 15.2 percent, construction at 13.1 percent, manufacturing at 11.8 percent and real estate at 7.9 percent.

That mix matters for operators and investors assessing the UAE market. The double-digit performance of financial and insurance activities points to robust returns in the services economy, while the sizeable shares held by trade, construction and manufacturing underline how much of the non-oil engine remains tied to logistics, building activity and production. Real estate, at 2.3 percent growth and a 7.9 percent share, continues to expand but at a more measured pace.

Meanwhile, the diversification narrative was reinforced in official commentary. WAM reported the FCSC as saying that the contribution of non-oil activities to real GDP increased to 79.2 percent in the first half of 2026, while oil activities accounted for 20.8 percent. The agency added that these figures reaffirm the importance of advancing economic diversification and expanding the contribution of non-oil sectors to support sustainable growth and strengthen the resilience and competitiveness of the national economy.

External assessments have been broadly supportive of the UAE’s positioning. The International Monetary Fund said in July that the country’s strong policy buffers and timely response had helped it withstand regional uncertainty. At the same time, the fund expected overall growth in 2026 to come in slightly lower than in 2025, as uncertainty weighs on tourism, transport, trade and real estate, the same sectors that drove the second-quarter contraction.

Taken together, the data sketch an economy in transition, with the non-oil share of output climbing steadily and services-led sectors delivering the strongest returns, even as externally exposed industries absorb the cost of regional disruption. For investors and operators, the first-half figures suggest the diversification strategy is holding: the growth mix is tilting further toward finance, communications and services, while the second-quarter dip serves as a reminder that tourism, transport and trade remain the most sensitive points in the system. Whether those externally exposed sectors recover in the second half will shape the full-year growth picture. Further detail on the figures is available at https://www.arabnews.com/business/uae-economy-grows-04-in-first-half-as-non-oil-sectors-expand-3005742.