UAE economy booms despite regional uncertainty

By: Naveed Farooq – Ziraat Times

Dubai/New Delhi: Investors and business entities from India, including Jammu & Kashmir, can rest assured about their business in the United Arab Emirates. Contrary to Iran war-time fears of big business disruption and  lower appeal as an economic safe haven, the country’s economy continues to boom on most key indicators.

Six months into the Iran war, the UAE is navigating one of its most significant economic  tests since the global financial crisis of 2008. Aviation, tourism, shipping and parts of the real-estate market have faced some disruption, yet, Ziraat Times’ analysis shows, the broader economic picture remains one of continued expansion and capital attraction.

Available data shows Dubai and Abu Dhabi are still drawing companies, investors and high-net-worth individuals. Banking liquidity is solid, financial-sector activity is growing, and major investment deals continue.

 The International Monetary Fund has described the UAE economy as showing “remarkable resilience” to the regional conflict, with banks well-capitalised and liquid, and both credit and deposits continuing to expand.

DIFC leads the way as financial centre expands

The clearest signal of ongoing confidence comes from the Dubai International Financial Centre.

At the end of the first half of 2026, DIFC reported 10,018 active registered companies after adding 2,318 new active companies over the preceding year. Regulated financial-services firms rose to 1,134 – a 16% increase.

These gains occurred after the outbreak of the regional conflict, reinforcing the centre’s continued appeal. While the Dubai Financial Services Authority has noted that some firms are reassessing geopolitical exposure and holding capital on the sidelines, it confirmed that business and capital have continued to flow into DIFC throughout the first half of the year.

DIFC’s growth stands as a strong indicator that the UAE’s financial ecosystem remains a magnet for regional and international players.

High-value investment and deal-making stay robust

Beyond the financial free zone, the UAE continues to dominate regional investment activity.

In the first half of 2026 the country accounted for 80.9% of GCC merger and acquisition activity, involving $52.6 billion across 131 deals. Abu Dhabi and Dubai remain destinations of choice for businesses, professionals and wealthy residents.

Population growth, demand for schools and skilled workers and the steady expansion of the financial sector all point to sustained attraction of people and capital, even as tourism, aviation, property and trade have felt the effects of the war.

Bank deposits continue to rise

Banking data reinforce the picture of resilience rather than retreat.

Despite tighter liquidity conditions after the conflict began, deposits and credit have continued to expand. The IMF highlighted that banks remain well-capitalised and liquid.

A sustained drop in non-resident or corporate deposits would have been an early warning. That pattern has not appeared. Instead, the banking system continues to absorb and intermediate capital, supporting the wider economy.

Real estate cools but still growing

Many investors from J&K these days ask whether their real estate investments in the UAE are safe. Hold on. The property market, despite some early concerns, is still growing, with growth in real estate demand still high.

Dubai recorded 11,147 home sales worth AED 21.43 billion in August alone, with year-to-date transactions already reaching AED 523.44 billion. High-end activity stayed firm: transactions above AED 10 million rose 29.5% in August.

Emaar reported that hotel occupancy, which fell sharply at the height of the conflict, has recovered to around 60% (still below the pre-war 83%). Real-estate sales are lower than pre-war peaks, but the company maintains a revenue backlog exceeding $50 billion.

Watching the indicators

The IMF expects 2026 growth to be somewhat lower than in 2025, with uncertainty weighing on tourism, transportation, trade and real estate.

Key metrics to monitor in the months ahead include non-resident and corporate bank deposits, central-bank foreign assets, foreign net investment on the Dubai Financial Market and Abu Dhabi Securities Exchange, high-value property purchases, DIFC registrations and closures, Jebel Ali cargo volumes, and tourism and aviation activity.

So far, however, these indicators show phenomenal resilience and unexpected growth.

Data sources

IMF Staff Concludes Visit to United Arab Emirates (July 2026)
GCC & UAE Economy & Market Update (Crowe UAE, September 2026)
Emaar statements on hotel occupancy and real-estate sales (Reuters, September 2026)
DIFC H1 2026 achievements (Government of Dubai Media Office)
Dubai Financial Services Authority comments (The Banker)