As the UAE enters 2026, economic policy is increasingly focused on strengthening resilience across trade and investment, supply chains, technology adoption, labour markets and public finances.
The past year saw continued progress across the UAE’s diversification agenda. The country advanced an ambitious trade strategy through its network of Comprehensive Economic Partnership Agreements (CEPAs), expanded investment in AI and digital infrastructure, and pushed ahead with sector-level reforms spanning logistics, manufacturing, energy and financial services. At the same time, external conditions became more challenging, with a softer oil price outlook, tighter global financial conditions and heightened global geoeconomic competition across trade, technology and supply chains.
Entering 2026, these dynamics are sharpening the UAE’s focus on resilience. Policy is increasingly directed towards broadening trade and investment relationships, securing access to critical industrial inputs, and accelerating AI deployment now that infrastructure constraints are easing. Fiscal policy is supported by rising non-oil revenues, particularly from the introduction of federal corporate income tax, which has strengthened the UAE’s fiscal position and reduced sensitivity to lower hydrocarbon receipts.
Together, these developments suggest that 2026 will build on the momentum of 2025, with the UAE deepening economic resilience and diversification across five defining themes.
Building broader and more diverse trade bridges
As geopolitical tensions persist and US–China relations remain strained, global trade dynamics are becoming more fragmented. A more transactional approach to trade and industrial policy in the US has reinforced the need for open, trade-dependent economies to actively diversify partners and routes to market. For the UAE, this environment strengthens the case for its longstanding strategy of positioning itself as a neutral, rules-based trading hub linking East, West and the Global South.
The UAE’s CEPA programme remains central to this approach. By the end of 2025, the UAE had activated agreements with more than two dozen partners across Asia, Africa and Europe. These agreements go beyond tariff reduction, embedding provisions on services, investment protection, digital trade, intellectual property and rules of origin that align trade policy with domestic priorities in logistics, advanced manufacturing and services exports.
Early post-CEPA data point to double-digit trade growth with key partners such as India, Türkiye and Indonesia, driven largely by non-oil goods, re-exports and services trade routed through UAE logistics and port infrastructure. This experience has prompted other countries in the region to pursue similar bilateral approaches, with Oman nearing completion of its agreement with India and Qatar signalling interest in expanding its own trade architecture.
The UAE is also deepening its participation in emerging trade corridors, with Asia a central focus. Engagement with Southeast Asia has intensified through the activation of CEPAs with Indonesia and Cambodia, alongside the signing and advancement of negotiations with partners such as Vietnam and Malaysia. These bilateral frameworks are being reinforced by growing two-way investment in ports, logistics, energy and industrial assets, strengthening the UAE’s role as a gateway between ASEAN production centres and markets in the Middle East, Africa and Europe. Progress on the India–Middle East–Europe Economic Corridor is expected to resume as Europe seeks more resilient supply routes and the UAE and broader region leverages its geographic position and infrastructure to anchor east–west flows.
Commercial diplomacy has increasingly complemented trade policy. In 2025, high-level engagements translated into major investment commitments between the UAE and the US, supporting access to procurement programmes, technology partnerships and industrial cooperation.
Taken together, these developments reinforce the UAE’s role as a central node in global trade networks, with bilateral agreements and investment partnerships used as practical tools to manage fragmentation and sustain growth.
Securing critical minerals and industrial supply chains
Global demand for critical minerals continues to rise as energy transitions and advanced manufacturing accelerate. Supply chains for materials such as lithium, cobalt, copper and rare earth elements remain concentrated and exposed to geopolitical risk, particularly in midstream processing and refining (see Figure 1). This has prompted governments and firms worldwide to seek more diversified and resilient supply arrangements.
For the UAE, the critical minerals strategy is closely linked to its industrial ambitions and its role as a capital, logistics and processing platform. Abu Dhabi-based investment vehicles have been active in forming partnerships across Africa and Asia to secure upstream access to battery metals and industrial inputs, while also targeting opportunities in trading, aggregation and value-added processing.
ADQ’s joint venture with Orion Resource Partners aims to build a dedicated platform for metals and mining investments. These efforts complement broader initiatives to attract battery metals processing, metals trading and downstream manufacturing into the UAE, aligned with the national industrial strategy and the country’s position as a conduit between African supply and Asian and European demand.
The UAE’s comparative advantage lies in capital deployment, logistics infrastructure, industrial zones and access to global markets. This division of roles points to a more integrated regional approach, with the UAE acting as a connector and scaling platform within global critical minerals value chains.
By 2026, the UAE is expected to deepen upstream partnerships, expand midstream and trading capabilities, and enhance logistics and storage infrastructure for strategic materials. These steps will support industrial growth while reducing exposure to supply disruptions in a more contested global environment.
Turning AI ambition into action
In 2025, global competition for compute power, skilled talent and secure data environments intensified. These pressures exposed a regional compute bottleneck, with limited access to advanced graphic processing units (GPUs), critical for accelerating AI model training and insufficient sovereign cloud capacity for large-scale model training.
The UAE responded with accelerated investment in data centres, cloud infrastructure and strategic partnerships to secure advanced chips. As a result, the country now ranks among the global leaders for planned and active GPU clusters (see Figure 2), with substantial new capacity expected to come online in 2026. The first phase of Stargate UAE is expected to commence operations, representing one of the largest sovereign-backed AI compute campuses being developed outside the US, and will be complemented by further expansions from Khazna Data Centres providing larger GPU clusters and higher-density cloud regions.
As compute constraints ease, 2026 is likely to mark a shift in the UAE from government-led infrastructure build towards company-level deployment. Financial services, logistics, transport, energy and retail are expected to move from pilot projects to operational AI systems, including sector-specific models, automation platforms and AI-enabled customer services.
Regulatory clarity will be an important enabler. The region’s environment allows data centre projects to reach operations within 18 to 24 months, materially faster than in many advanced economies. Over the coming year, more specific guidance is expected on training data governance, model risk management, independent testing requirements and incident reporting. This will provide firms with a more predictable compliance framework and support adoption in regulated sectors.
Data sovereignty will also shape deployment. As domestic cloud capacity matures, localisation requirements for sensitive datasets are likely to expand, particularly for government services, healthcare and financial data. This will drive further investment in national data platforms and secure training environments, enabling AI development without cross-border data transfers.
Jing Teow, Partner, Economic Policy and Strategy, PwC Middle East
Managing workforce transitions in an AI-enabled economy
As AI adoption accelerates, labour market policy in the UAE is shifting from job creation alone towards managing workforce transitions. AI-enabled automation and augmentation are expected to reshape roles across financial services, logistics, customer service and government, increasing demand for digital, analytical and hybrid skill sets.
Short, modular training programmes are expected to scale further in 2026. Micro-credentials will become more embedded within national qualification frameworks, with greater standardisation and closer alignment to employer needs. Programmes in data analytics, cybersecurity, digital operations and AI-assisted business processes continue to expand, supported by partnerships between government entities, major employers and global technology firms. Key examples include applied machine learning programmes delivered with partners such as Microsoft and IBM and Dubai Future Foundation’s One Million AI Prompters initiative.
Workplace-based learning is also gaining importance. Firms are investing more heavily in structured on-the-job training and apprenticeship-style pathways that build practical digital capabilities and support translation roles, where employees integrate AI tools into workflows and redesign processes.
Public platforms are becoming more data-driven. The UAE’s Emirati Smart Human Resource Platform, which integrates employer demand, skills profiling and placement data across the public and private sectors, is expected to evolve further, guiding workforce planning and directing reskilling investment more precisely.
Policy emphasis is increasingly placed on enabling mobility rather than preserving existing roles, with targeted incentives to support mid-career transitions and movement into higher-value private sector occupations.
Strengthening fiscal resilience in a lower oil price environment
Despite oil prices expected to remain below recent peaks, the UAE enters 2026 from a relatively strong fiscal position. The introduction of federal corporate income tax from 2025 is expected to generate a growing and more predictable non-oil revenue stream, supporting an increase in federal budget revenues and providing a meaningful buffer against softer hydrocarbon receipts.
This additional revenue capacity reduces the UAE’s exposure to oil price volatility and gives policymakers greater flexibility over the scale and composition of spending. Fiscal policy is likely to reflect a more disciplined expansion, with resources directed towards areas that reinforce long-term competitiveness and economic resilience. Investment is expected to be concentrated in priority sectors such as AI infrastructure, digital platforms, advanced manufacturing and logistics, where public spending can crowd in private capital and accelerate capability building.
Asset monetisation and public-private partnerships will continue to play a complementary role. The UAE is expected to selectively monetise energy and logistics assets, using listed platforms to recycle capital into strategic investments rather than fund recurrent expenditure. PPPs will remain an important mechanism for delivering infrastructure in transport, utilities and social services while managing balance-sheet exposure.
Government debt remains low by international standards, preserving headroom for targeted borrowing where appropriate. At the same time, fiscal authorities are increasingly focused on expenditure quality, aligning capital allocation with strategic priorities rather than broad-based spending increases.
Revenue reform efforts will continue. Rather than introducing new broad-based taxes, policy emphasis is expected to remain on strengthening corporate tax and VAT administration, improving compliance and expanding the digital and cross-border transaction base. The domestic minimum top-up tax should further stabilise non-oil revenues over time.
Overall, 2026 is set to reflect a phase of fiscally supported investment rather than consolidation. Backed by rising corporate income tax revenues, the UAE is positioned to expand spending selectively while maintaining a prudent, credibility-driven fiscal framework in a lower oil price environment.
A focus on long-term value creation
The UAE enters 2026 with a clear agenda: strengthen economic resilience and build the foundations of new industries to sustain growth in a more uncertain global environment. How effectively these priorities are delivered will determine the UAE’s ability to convert current investments and reforms into durable, long-term economic gains.
The writer is Partner, Economic Policy and Strategy, PwC Middle East.
