The 80% Imperative
The UAE’s federal economic strategy establishes a clear quantitative benchmark: non-oil sectors must constitute at least 80% of gross domestic product by 2031. This target, embedded within the We the UAE 2031 vision, represents both an economic and a political commitment to structural transformation. As of Q3 2025, non-oil GDP accounted for approximately 76.8% of total output, indicating meaningful progress but requiring sustained annual gains of roughly one percentage point through the remainder of the decade.
Quarterly Non-Oil GDP Momentum
| Quarter | Non-Oil GDP Growth (YoY %) | Oil GDP Growth (YoY %) | Non-Oil Share (%) |
|---|---|---|---|
| Q1 2024 | 5.1 | -1.2 | 75.4 |
| Q2 2024 | 5.4 | -0.8 | 75.9 |
| Q3 2024 | 5.8 | 0.3 | 76.2 |
| Q4 2024 | 5.6 | 1.1 | 76.0 |
| Q1 2025 | 5.3 | 0.9 | 76.3 |
| Q2 2025 | 5.7 | -0.4 | 76.6 |
| Q3 2025 | 5.9 | -1.0 | 76.8 |
The data reveals a consistent pattern: non-oil GDP growth has held above 5% on a year-over-year basis for seven consecutive quarters, while oil GDP has oscillated around flat growth, largely driven by OPEC+ production discipline.
Sector-Level Contributions to Non-Oil Expansion
Breaking down non-oil GDP growth by contributing sector clarifies where the structural momentum originates.
| Sector | Contribution to Non-Oil Growth (ppt, 2024) | Growth Rate (%) |
|---|---|---|
| Financial Services | 1.4 | 8.2 |
| Technology & Digital | 1.3 | 14.6 |
| Tourism & Hospitality | 0.9 | 9.8 |
| Manufacturing | 0.7 | 6.4 |
| Transport & Logistics | 0.6 | 5.1 |
| Real Estate | 0.5 | 4.7 |
| Wholesale & Retail Trade | 0.4 | 3.9 |
| Other Services | 0.6 | 3.2 |
Financial services and the technology sector together contributed 2.7 percentage points to non-oil growth in 2024, accounting for nearly half of total non-oil expansion. Tourism’s recovery to pre-pandemic trajectory has been a significant tailwind, while manufacturing contributions reflect early returns from Operation 300bn investments.
Structural Drivers
Three fundamental forces are propelling non-oil GDP expansion. First, regulatory liberalisation, including 100% foreign ownership reforms enacted across most sectors, has lowered barriers to entry and increased competitive dynamism. Second, infrastructure investment, particularly in logistics corridors, digital connectivity, and energy transition assets, has expanded productive capacity. Third, population growth, driven by skilled migration inflows, supports both supply-side labour inputs and demand-side consumption.
The UAE’s positioning as a regional headquarters hub has intensified since 2022, with multinational firms relocating operational centres to Dubai and Abu Dhabi. This concentration effect generates multiplier impacts across professional services, real estate, and retail sectors.
Sensitivity Analysis
The pathway to 80% is sensitive to several external variables. Oil price fluctuations affect the denominator: a sustained oil price increase mechanically raises oil GDP share even if non-oil sectors continue growing. At USD 90 per barrel, achieving 80% non-oil share by 2031 requires non-oil growth to average 6.2% annually. At USD 70 per barrel, the required rate falls to 4.8%.
| Oil Price Scenario (USD/bbl) | Required Non-Oil Growth (Annual %) | Probability Assessment |
|---|---|---|
| 60 | 4.1 | Target comfortably met |
| 70 | 4.8 | Target met under current trajectory |
| 80 | 5.5 | Target met with sustained effort |
| 90 | 6.2 | Target requires acceleration |
| 100+ | 7.0+ | Target at risk without policy adjustment |
Assessment
The UAE’s non-oil GDP trajectory is firmly positive, and the 80% target appears achievable under moderate oil price assumptions. The principal risk is not a failure of non-oil growth but rather an oil price spike that inflates hydrocarbon GDP and mechanically dilutes non-oil share. Policy responses, including accelerating non-oil sector investment during high-oil-price periods, can mitigate this compositional effect. The underlying structural transformation remains on a sound footing heading into 2026.