The UAE’s real gross domestic product fell 2.1% year on year in the second quarter of 2026 to AED476.9 billion ($130 billion), as disruptions linked to the regional conflict weighed on tourism, transport and trade, according to preliminary estimates from the Federal Competitiveness and Statistics Centre (FCSC).

Non-oil activities contracted by 1.1% in the quarter ended June 30, though they continued to account for a growing share of the economy, rising to 79.2% of real GDP in the first half of 2026, up from 78.1% a year earlier. Oil activities made up the remaining 20.8%, down from approximately 23% in the same period of 2025.

For the first half of 2026 as a whole, real GDP reached AED961.9 billion at constant prices, a modest increase of 0.4% on the same period in 2025, supported by non-oil GDP growth of 1.8%. The FCSC said the results reflect continued diversification of the UAE’s economic base, with non-oil sectors driving the bulk of activity.

Among major sectors, financial and insurance activities recorded the strongest growth in the first half, expanding 14.8%, followed by information and communications at 7.3%, health and social work at 6%, construction at 5.1%, government services at 3.6% and real estate at 2.3%. By contribution to non-oil GDP, trade ranked first at 16.2%, followed by financial and insurance activities at 15.2%, construction at 13.1%, manufacturing at 11.8% and real estate at 7.9%.

The second-quarter contraction reflects pressure that has built since the outbreak of the US-Iran war in late February, which was followed by the near-closure of the Strait of Hormuz and widespread disruption to regional travel and commercial activity. Oil prices have remained around $100 per barrel despite some recovery in Gulf flows, reflecting ongoing shipping risks and elevated transport costs.

The FCSC noted that the first-half and second-quarter figures are preliminary estimates. A comprehensive revision of the UAE’s national GDP time series is under way and the updated figures are expected to be released in the first quarter of 2027.

The Middle East and North Africa region's economy is projected to contract by 0.3% in 2026 before rebounding 6.3% in 2027, the International Monetary Fund said, as the prolonged closure of the Strait of Hormuz weighs heavily on energy producers across the Gulf.

The forecasts, published in the IMF's latest World Economic Outlook on Tuesday, represent a downward revision of 2.2 percentage points for 2026 and an upward revision of 1.7 percentage points for 2027 compared with the Fund's April projections. The IMF said the revisions reflect a longer-than-anticipated Hormuz closure and a correspondingly larger recovery once shipping routes normalise.

"Bahrain, Iraq, Kuwait and Qatar — commodity producers most affected by disruptions to energy output and transport — are projected to experience double-digit contractions of their economies in 2026, followed by double-digit expansions in 2027 as production, exports and logistics normalise," the IMF said.

Saudi Arabia is expected to fare somewhat better, given more diversified energy export routes. The Fund projects a 3.3% contraction in the Saudi economy this year and a recovery of nearly 8% in 2027.

The IMF previously forecast some growth for Saudi Arabia, the UAE and Oman in 2026; it now projects significant contractions for all but Oman.

The IMF's baseline scenario assumes the Strait of Hormuz reopens in March 2027 and gradually returns to pre-war conditions by early 2028. The US-Israeli conflict with Iran, now in its eighth month, has continued to disrupt commercial shipping through the strait, with the exception of a brief period in June when an interim peace deal allowed vessels to transit unharmed.

The projections may not fully account for an escalation in hostilities between Saudi Arabia and Yemen's Houthi militia. The Iran-backed group has struck Saudi energy facilities and civilian infrastructure in recent weeks, including attacks on Riyadh's main international airport that resulted in multiple fatalities and injuries to hundreds.

Speaking at the WPC Energy Congress in Riyadh this week, energy minister Prince Abdulaziz Bin Salman Al Saud said the capital remained safe and that Saudi Arabia would continue investing in oil and gas infrastructure to bypass Hormuz.

Crude oil prices are expected to average 41% higher this year than in 2025, and natural gas prices 48% higher, based on data extrapolated from September 21.

Despite the regional disruption, the IMF's global growth projections are broadly unchanged from April, supported by energy rerouting, increased production outside the Gulf, inventory drawdowns and an investment boost driven by artificial intelligence.

Standard Chartered has become the first international bank in the UAE to offer direct bitcoin and ether trading through its mobile app, following its onshore UAE entity receiving a full broker-dealer licence from Dubai's Virtual Assets Regulatory Authority (Vara).

Customers can buy and sell the two cryptocurrencies using their existing bank accounts without needing a separate crypto wallet or transferring funds to another platform. Access is initially restricted to existing clients who qualify as professional investors and meet eligibility and suitability requirements.

"Dubai and the UAE have established a very forward-looking regulatory environment" that made it the right location for the bank's first global launch of this capability for individual clients, said Ayesha Abbas, managing director and head of affluent and wealth solutions for EMEA and the UAE. She described Dubai's internationally connected client base as one that "increasingly expects access to the most relevant investment opportunities."

Trading will be on an execution-only basis, meaning clients make their own investment decisions rather than receiving advice on individual transactions. Abbas described eligible clients as those with investment knowledge and experience and a qualifying level of liquid net worth, without specifying a financial threshold. Broader retail access will depend on regulation, client demand, market maturity and the relevant suitability checks, risk disclosures and operational safeguards, she said.

The bank worked extensively with Vara to secure the licence. Standard Chartered's approval brings the total number of fully licensed virtual asset providers in Dubai to 58, alongside exchanges including Binance, OKX and Crypto.com. Vara was established in March 2022.

The launch comes after bitcoin retreated sharply from an October 2025 peak of around $126,200 to roughly $83,600. Abbas said the bank regularly reviews its products and that consumer sentiment "remains dynamic."

Standard Chartered, headquartered in London and operating across 55 markets, generated $21 billion in operating income in 2025. The bank has been expanding its regional footprint, opening operations in Saudi Arabia in 2021 and Egypt in 2024, both serving corporate and institutional clients. It announced in June that it was exploring a sale of its Bahrain wealth and retail operations while retaining corporate and investment banking activities there.

A trade agreement between the UAE and the five-nation Eurasian Economic Union — Russia, Kazakhstan, Belarus, Armenia and Kyrgyzstan — entered into force on October 6, eliminating or reducing tariffs across 85% of tariff lines and covering 95% of bilateral trade by value.

Non-oil trade between the UAE and the EAEU reached more than $33.3 billion in 2025, up 15% on the previous year. The Eurasian Economic Commission expects the agreement to add at least $5–6 billion annually to that figure.

"The agreement has an asymmetric effect on the two sides' tariff commitments. For the UAE, it mainly expands the range of goods traded duty-free, while for the EAEU the main effect is lower tariffs," the Russia-UAE Business Council said, adding that for established trade flows, the deal would make it easier for companies to bring new products to market.

The asymmetry reflects the two sides' starting positions. UAE import tariffs are generally low, with most goods subject to rates of 0% or 5%. EAEU tariffs can reach 80% on some product lines, meaning the cuts represent a more substantial change for exporters selling into the bloc. Russia's Resource Agribusiness Group noted that the UAE's existing 5% tariff on crude sunflower oil from the EAEU will fall to zero in the first year.

For UAE-based manufacturers, lower EAEU tariffs open a new incentive to produce or process goods in the Emirates for export into the bloc. Abu Dhabi coffee producer Maatouk 1960 Factory, which imports green beans from Latin America, Africa and Asia and packages them as UAE-origin products, plans to begin shipments to the EAEU in the first quarter of 2027.

The agreement also raises concerns in some EAEU industries. The Russian jewellery sector faces the prospect of gold and silver jewellery from the UAE — currently subject to a 10% import duty — entering at zero tariff once the deal takes effect. Questions have been raised about whether goods from third countries such as China or India could be routed through the UAE to benefit from the preferential rate after simple repackaging.

Serafima Pankratova, counsel at Balayan Group, a Moscow-based law firm, said the main legal challenge would be proving the origin of goods. Customs authorities may also verify eligibility for preferential treatment after clearance and recover duties if origin requirements are not met, she said. Dmitry Antonov, senior vice-president of Resource, cautioned that tariff reductions alone would not be sufficient, pointing to product approvals, certification, logistics and local distribution as core requirements for sustainable trade.

The deal aligns with Dubai's D33 economic agenda, which aims to more than double manufacturing value added by 2033, and with the UAE's broader strategy of using its expanding trade agreement network to attract manufacturing and processing activity. Although the full impact will take time to materialise, the agreement is expected to shift how companies structure supply chains between the two markets.

Qatar is opening its domestic debt market to international investors through a new settlement link with Euroclear, the Brussels-based international central securities depository, allowing global buyers to access and settle Qatari riyal-denominated government bonds and sukuk for the first time.

Under the arrangement, Euroclear Bank will provide international settlement services for eligible conventional government bonds and Islamic bonds, while Edaa, Qatar's central securities depository, will continue to serve local investors. Qatar's central bank will retain responsibility for issuing securities and making payments to investors.

"By making Qatari government bonds and sukuk Euroclearable, we are helping to simplify market access, enhance liquidity and strengthen Qatar's appeal to global investors," said Valérie Urbain, chief executive of Euroclear.

Sheikh Ahmed Al-Thani, deputy governor of the Qatar Central Bank, said the move was a practical step towards expanding international access to Qatari government debt instruments. The initiative is expected to improve market liquidity and deepen capital flows into Qatar, and aligns with the country's National Development Strategy 2024–30, which aims to build a more globally connected capital market.

The link comes as Qatar navigates a period of economic pressure. Gross domestic product fell 7% year-on-year to QAR171 billion ($47 billion) in the first quarter of 2026, while public borrowing from local banks has declined by $5 billion since the onset of the Iran conflict. Private-sector credit has grown little since Qatar hosted the 2022 football World Cup.

Qatar holds the world's third-largest proven gas reserves, but liquefied natural gas exports have been disrupted by Iranian missile and drone attacks on its energy facilities and the near-closure of the Strait of Hormuz.