IMF: UAE Economy Absorbed Middle East Conflict Shock, but Credit and Real Estate Are Cooling

The United Arab Emirates’ economy has remained resilient during the Middle East conflict, the International Monetary Fund said July 17 after a staff visit to Abu Dhabi and Dubai from July 7 through July 16. The IMF said sound fundamentals, fiscal and external buffers, government measures and the Central Bank of the UAE’s Financial Institution Resilience Package helped contain the shock.

Rerouted oil and other trade flows also helped preserve essential supply chains. The IMF expects the UAE’s fiscal and external balances to remain in surplus, supported by higher oil prices, conservative budgeting and strong policymaking. The banking system remained well-capitalized and liquid, although liquidity has tightened since the conflict began. Credit and deposits continued to expand.

Pressure points

The IMF expects private-sector credit growth to moderate as non-hydrocarbon activity slows. Real-estate activity also moderated during the first half of 2026 after several years of strong growth, with uneven effects across market segments and locations.

The IMF’s next priorities are agile policies, continued financial-stability measures, economic diversification, structural reforms and stronger supply-chain resilience. It said deeper trade integration, including Comprehensive Economic Partnership Agreements and the National Programme to Strengthen Supply Chain Resilience, could support non-oil growth. The statement reflects IMF staff views and is not an Executive Board decision.