The UAE economy expanded 3.0% year on year in the first quarter of 2026, reaching AED485 billion at constant prices. The stronger signal came from outside hydrocarbons with non-oil GDP growing 4.8%, lifting its share of total output to 79.4%, from 78.0% in 2025. That puts the country’s diversification strategy increasingly in the hands of finance, construction, trade and services rather than oil production alone.
Finance and Construction Lead the Quarter
Financial and insurance activities grew 17.3%, the fastest pace among major sectors, while construction expanded 8.1%. Health and social work rose 7.7%, information and communications increased 5.9%, and real estate grew 4.8%. Finance contributed the most to headline growth, adding 2.44 percentage points, followed by construction at 1.04 percentage points.
Credit growth, wealth management, capital-market activity and property development are feeding directly into the sectors expanding fastest. The government’s policy priorities point in the same direction. The OECD says the UAE has identified renewable energy, transport and logistics, information and communications technology, financial services and manufacturing as priority areas for foreign investment.
Foreign Capital Holds Up Through Regional Conflict
The first-quarter growth figures carry more weight because they cover a period of severe regional disruption. The UAE government said in July that around 98% of foreign investments remained unaffected during the preceding months, suggesting that the conflict had produced limited disruption to the country's existing foreign-investment base. An updated post-conflict FDI inflow figure has not yet been published, so the 98% figure should be treated as a measure of investment continuity rather than fresh capital entering the country.
Trade provides a clearer measure of economic activity through the disruption. UAE non-oil foreign trade reached a record AED1.937 trillion in the first half of 2026, up 13.1% year on year, while non-oil exports climbed 23.9% to AED452.8 billion. Trade with countries covered by the UAE's Comprehensive Economic Partnership Agreements reached AED304.3 billion over the same period.
Those numbers strengthen the resilience argument behind the 3% GDP result. Regional conflict disrupted shipping, energy markets and investor sentiment, yet most existing foreign investment stayed in place while non-oil trade continued expanding. For a country positioning itself as a financial, logistics and commercial hub between Asia, Europe and the Middle East, maintaining capital and trade flows during a regional shock is as relevant as attracting them during calmer periods.
ETFs Mirror the Non-Oil Growth Mix
For investors seeking broad UAE exposure, the iShares MSCI UAE ETF, UAE, is the largest established single-country route in the U.S. market. As of August 10, the fund held $321.0 million in net assets, 56 securities and charged a 0.59% expense ratio. Financials represented 40.52% of assets as of August 7, while real estate accounted for 18.13%, communications 11.36% and industrials 9.98%. That makes the ETF unusually well aligned with the sectors currently driving domestic GDP.
GCC investors can also use the Lunate S&P UAE UCITS ETF, UAED, which tracks 30 liquid UAE-listed companies through the S&P UAE BMI Liquid 20/35 Capped Index and charges a 0.60% total expense ratio. Its Irish UCITS structure may suit institutions that prefer a European regulatory wrapper while trading locally.
Shariah-conscious investors have the Lunate S&P UAE Shariah ETF, UAEA, which tracks 30 liquid Shariah-compliant UAE equities and reinvests dividends.
The investment case is therefore becoming more specific: UAE growth is increasingly tied to finance, construction and externally funded non-oil activity, while the country’s equity ETFs already carry heavy exposure to those same engines.
