A Historic Leap: How the UAE Plans to Drive Growth with its 2026 Budget

Fiscal Expansion Sets the Stage for 2026 Growth

The UAE has approved its largest-ever federal budget at AED 92.4 billion for 2026, a 29% increase from the AED 71.5 billion allocated in 2025. This record-breaking budget reflects strong confidence in the country’s economic resilience and positions the government to stimulate domestic demand, capital investment, and sustainable development. We expect the expansionary fiscal stance to support GDP growth in 2026 and strengthen the UAE’s long-term macroeconomic stability.

Strategic Sector Allocations Highlight Development Priorities

The 2026 budget emphasizes investments in sectors that directly impact citizens and businesses.

• Social development and pensions receive AED 34.6 billion (37%), with allocations covering:

  • 📚 Education (19%)

  • 🩺 Healthcare (6%)

  • 💰 Pensions (6%)

  • 🤝 Social affairs (4%)

  • 🏛️ Public services (2%)

• Government affairs receive AED 27.1 billion (29%)

• Financial investments AED 15.4 billion (17%)

• Federal expenses AED 12.7 billion (14%)

• Infrastructure and economic development AED 2.6 billion (3%).

This distribution reinforces the UAE’s commitment to human capital development, social stability, and long-term productivity growth.

Driving Non-Oil Sector Momentum and Competitiveness

By targeting spending toward education, healthcare, social services, and infrastructure, the 2026 budget aims to boost non-oil sector activity, increase private-sector spillovers, and enhance trade competitiveness. Public investment in strategic sectors is expected to support job creation, improve productivity, and strengthen domestic demand, while prudent fiscal management would help maintain moderate inflation and financial stability.

Outlook for 2026 and Beyond

The 2026 federal budget represents more than just record spending; it is a strategic fiscal plan designed to reinforce the UAE’s position as a diversified, resilient economy. With strong allocations to high-impact sectors and continued emphasis on long-term development, the UAE is set to drive sustainable growth, improve quality of life for its citizens, and maintain its competitive edge in the global economy.

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