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Kristalina Georgieva told finance ministers and central bankers gathered for the Arab Fiscal Forum that the UAE has emerged as a standout example of economic diversification with its non-oil activities driving 80 per cent of overall performance. The IMF managing director singled out the Gulf state’s embrace of artificial intelligence as particularly impressive and positioned it as a leader for the wider region to follow. According to Georgieva the Arab world has demonstrated resilience by maintaining reform momentum including the reduction of energy subsidies even as global conditions deteriorated.
The IMF upgraded its global growth forecast to 3.3 per cent for 2026 and 3.2 per cent for 2027 reflecting better than expected performance in the United States the Middle East India China and the eurozone an IMF assessment found. Global inflation is projected to ease to 3.8 per cent this year and 3.4 per cent in 2027 helped by softer demand and declining energy prices the same outlook indicated. Georgieva noted that these revisions came despite profound shifts in geopolitics trade policy and demographics that are generating enormous uncertainty across the world economy.
Growth across the Arab region is expected to accelerate to 3.7 per cent in 2026 supported by higher oil production for exporters lower import costs for importers robust remittances and a rebound in tourism according to the IMF managing director. Georgieva expressed pride in the region’s progress on diversification and highlighted how financial conditions had improved even amid external pressures. The IMF chief added that many oil exporting economies including the UAE are seeing substantial benefits from non-oil sectors.
Risks to both the Middle East and the global outlook remain elevated with geopolitics large and rising debt levels fiscal strains and conflicts representing the most troubling threat an IMF evaluation stated. Georgieva urged governments to prioritise sound policies and strong institutions as the primary defence against vulnerabilities that lie beyond their control. She emphasised that mitigating conflict would improve prospects across multiple fronts while calling for measures to address debt burdens exacerbated by demands for higher public spending.
Georgieva encouraged Arab states to reduce direct government involvement in economic activity and allow the private sector to flourish as a source of dynamism and resilience the IMF managing director said in her remarks. Over recent decades most economies have shifted away from state direction of companies toward private sector leadership and this approach has delivered stronger outcomes she observed. The recommendation aligns with the UAE’s own trajectory where non-oil GDP expanded 6.8 per cent in 2025 to reach Dh1.5 trillion according to Federal Competitiveness and Statistics Centre data.
The Central Bank of the UAE projected real GDP growth of 4.9 per cent for 2025 and 5.3 per cent in 2026 with non-hydrocarbon activities forecast to rise 4.5 per cent and 4.8 per cent respectively in those years a central bank report showed. These gains build on 2025’s overall 6.2 per cent expansion to Dh1.9 trillion underscoring the success of long-term diversification strategies. Georgieva’s February address came ahead of the World Governments Summit and reinforced the importance of private sector development to sustain momentum amid ongoing global tests.
