The UAE's Stock Markets Continue to Decline: Should You Worry?
The UAE market was initially forecast to achieve a record growth of 6.7% in 2025—from 3.8% in 2024. However, amid global trade war jitters, stock markets in the United Arab Emirates continue to decline. What does this mean for businesses? Should they begin to worry?
Earlier this year, reports were optimistic about the UAE's growth, particularly in the tech sector. This is largely due to the region's significant expansion in digital innovation and continuous adoption of technologies.
A report by Statista predicts that revenues from the technology services market in the UAE will increase by approximately USD 3.8 billion in 2025. According to the report, "[the] growth can be attributed to the continuous technological advancements and increasing adoption of IT services across various industries in the country."
However, with Dubai's main market falling by 1% only a few days ago, the region's expected growth could be forestalled, resulting in multiple ramifications for businesses.
Why You Should Not Worry
Although the stock markets have declined, the UAE's diversification strategy has mitigated the risks of further decline and even opened opportunities for growth.
The UAE's future economy is built on three fundamental pillars:
As what Mohammed Alhawi, undersecretary at the UAE’s Ministry of Investment, stated, "the name of the game is diversification."
"...the name of the game is diversification." -Mohammed Alhawi, undersecretary at the UAE’s Ministry of Investment
Results have been promising so far. The UAE has recorded a 3.8% GDP growth in the first nine months of 2024—highlighting the country's economic diversification strategies. Additionally, reports projected the UAE's growth to accelerate further to 4.5 percent in 2025 and 5.5 percent in 2026.
But are all these enough for businesses not to worry?
According to reports, while the UAE’s economy faces external challenges such as fluctuations in global oil prices, inflationary pressures, and geopolitical uncertainties, its government initiatives in technology, green energy, and entrepreneurship are still expected to drive continued momentum.
Just recently, the UAE announced its plans to double its foreign direct investments to 240 billion dirhams ($65.35 billion) annually by 2031.
Foreign investment, trade, and tourism are fueling the UAE's strong economic performance, positioning it among the top growth markets globally, with analysts forecasting further expansion in 2025.
Growth in Multiple Sectors
Reports in multiple sectors have also been generally positive.
According to reports, the UAE's insurance industry is poised for growth—between 10% and 20% in 2025.
The region's property market growth also continues to accelerate Dubai's real estate (which saw prime residential capital values rise by 6.8 percent and rental values surge by 23.5 percent) leading the global market.
With the UAE's continuous drive to digitally innovate and adoption of cutting-edge technologies, a stable annual growth rate of 6.24% from 2025 to 2029 in the sector is predicted.
The UAE’s digital economy growth is estimated to be at $140 billion, with AI's contribution to the GDP set at $96 billion by 2030.
Despite the setbacks experienced by UAE's market in the recent weeks, the general forecast is positive. With the intense diversification efforts in the region, the UAE has achieved greater resilience that allows it to grow amid a turbulent global market.