5 Years After the Great Lockdown: The UAE as the True Example of Economic Diversification and Exceeding Expectations

This March will mark five years since the Great Lockdown, which led to the biggest contraction in global economic activity since the Great Depression, with a decline of -3.1%, surpassing the Great Financial Crisis. Despite the global economy's quick rebound due to prompt government stimulus injections, rising geopolitical tensions soon after posed further challenges.

Fortunately, the UAE has emerged unscathed from the tensions, serving as a refuge and haven for residents of countries involved in conflicts. Although OPEC+ had to face a drastic increase in demand due to the disruption of oil supply, the OPEC+ countries did not succumb to the pressure of increasing their production by a great extent rather by smaller measures that maintained the price stability of the market.

Being a longstanding member of the OPEC+ cartel since 1967, the UAE has stood through its market challenges and agreements to tackle those challenges. Despite the recent lower-than-expected oil production under the OPEC+ agreement, the IMF anticipated a decline in revenue. However, the UAE has surpassed these expectations by gradually implementing the OPEC+ quota, enabling it to forecast over 2% growth in hydrocarbon GDP.

Moreover, the IMF and World Bank predict the UAE economy to grow by 4% this year, considering its approach not only in the hydrocarbon industry but also in the non-hydrocarbon industries including tourism, construction, and financial services coupled with strong capital inflows.

Additionally, the country is being prudent and taking measures to prevent a real estate bubble from forming like the Great Financial Crisis. The IMF highlighted that UAE banks have reduced their exposure to the real estate industry by 4%. Furthermore, the UAE has ventured into the renewable energy sector and proven itself for its economic diversification.

Another industry that is rapidly growing and changing the business landscape of the UAE is the e-commerce industry which has pushed the wholesalers and distributors to change their business models.?

The market is projected to grow by 8.39% in 2025, since more than 65% of the population shops online, the switch by distributors is mandated for the businesses to remain competitive and take advantage of the lucrative opportunity.

With this in mind, businesses in the UAE have sought to appoint the best CEOs to drive profit growth. Multiple CEOs were also part of the recent UAE delegation to the World Economic Forum in Davos, where they were able to contribute to collaboration and partnership discussions.

In the past year, there has been an increase of 20% in the appointment of CEOs across various industries. The industries expected to experience a further rise include education, healthcare, and the digital sector.?

Most of the leadership and management positions were filled by external hires. Evidently, the Human Capital Management (HCM) industry is another industry in the UAE experiencing increased demand and even more so in 2025.?

As long as the UAE government continues to remain prudent and ahead of global economic activity, it is likely to sustain its growth and avoid past mistakes. Whether it be the IMF or the World Bank, the UAE continues to outdo expectations likewise.

Has UAE exceeded your expectations?