Source: Dubai Islamic Bank. Read the original report (PDF).
Dubai Islamic Bank published its November 2025 Economic Bites report, a monthly snapshot of GCC macroeconomic conditions. November 2025 delivered a notably positive set of indicators across the region. Here is what the data shows and what it means for businesses operating across the Gulf.
UAE PMI: Fastest Expansion Pace in Nearly a Year
The UAE Purchasing Managers Index (PMI) rose to 54.8 in November 2025, up from 53.8 in October, marking the fastest pace of non-oil private sector expansion in nearly a year. A reading above 50 indicates expansion; a reading of 54.8 signals strong momentum.
What drove the jump: stronger market conditions, higher new orders, increased output, and notably, significant new hiring. Firms added staff to meet rising demand. Wage pressures did push business costs upward slightly, but optimism about future activity also improved, supported by strong sales pipelines and a favourable operating environment. Output growth in November was the joint-fastest in over 18 months.
For context across the GCC: KSA PMI stood at 58.5 (still the region’s highest despite easing from October’s 60.2), Qatar at 51.8, and Kuwait at 53.4. The entire GCC non-oil private sector is in expansion territory, an important backdrop for commercial activity across the region.
Dubai GDP: 4.4% Growth in H1 2025
Dubai’s economy expanded 4.4% year-on-year to AED 241 billion in H1 2025, led by a solid Q2 growth of 4.7% (AED 122 billion). The growth was broad-based: trade, real estate, finance, construction, and tourism all contributed, reflecting continued diversification under the Dubai Economic Agenda D33.
Sector highlights: the health sector surged 20%, construction rose 8.5%, real estate grew 7% amid a 40% jump in property sales signalling sustained investor confidence. Wholesale and retail trade remains the largest contributor to overall GDP at 23.8%, a reminder that Dubai is fundamentally a commercial trading city before it is anything else.
Financial and insurance services contributed 12.5% of GDP. Health and social work activities posted the highest growth rate at 20% in H1 2025. These figures reinforce that the Dubai economic model is working: diversification is real, not just aspirational.
GCC Inflation: Contained but with Pockets of Pressure
Dubai headline inflation climbed to 3.4% year-on-year in October 2025, up from 2.9% in September and the fastest annual price increase since mid-2024. The key drivers were transport inflation at +4.2% (higher petrol prices), recreation and culture at +6.7%, and tobacco at +3.7%. Housing and utilities, typically the largest contributor, eased to +5.5% year-on-year, its lowest level since April 2023.
Month-on-month, consumer prices increased only +0.6%, suggesting the headline annual rate is partly a base effect comparison. Inflation is expected to remain contained through Q4 2025 as cooling housing costs and easing fuel prices moderate headline pressure.
Saudi Arabia CPI: 2.2% year-on-year in October 2025, driven primarily by housing and utilities (+4.5%). Qatar: 1.2% year-on-year. Regional inflation is broadly manageable across the GCC, with no market facing the kind of entrenched inflationary pressure seen in some Western economies.
Saudi Arabia: 5% GDP Growth, Wider Fiscal Deficit
Saudi Arabia posted real GDP growth of 5% year-on-year in Q3 2025, a strong rebound on the back of higher oil output and solid non-oil activity. Non-oil GDP grew 4.5%, government services expanded 1.8%, and industrial production rose 9.3% year-on-year in September on double-digit gains in mining, energy supply, and manufacturing.
The nuance: stronger real-sector growth has not yet translated into improved fiscal position. The Q3 2025 budget deficit widened to SAR 88.5 billion (USD 23.6 billion) as overall revenues fell 13% year-on-year despite firmer non-oil receipts, and spending rose 6%. Saudi Arabia is deliberately running a deficit to fund Vision 2030 infrastructure, accepting short-term fiscal strain for long-term economic transformation. For businesses operating in the Kingdom, this means public investment continues to flow.
The GCC Schengen Moment: UAE-Bahrain Travel Pilot
The GCC approved a landmark initiative to streamline travel across member states, beginning with a December pilot between the UAE and Bahrain. Under the new system, travellers complete immigration and security checks only at their point of departure, eliminating arrival-airport procedures and substantially reducing transit times. If successful, the system will expand to all six GCC countries.
This is a bigger deal for business than it might appear. A unified GCC travel zone, with the longer-term goal of a Schengen-style unified GCC visa and GCC Rail network by 2030, would materially reduce friction in cross-border commerce. Stronger regional mobility supports tourism, aviation, and services sectors, increases cross-border spending, and positions the GCC as a more integrated economic bloc for international businesses entering the region. The companies best positioned to benefit are those operating across multiple GCC markets, the reduced friction directly lowers their operational cost and expands their commercial reach.
The Overall Read
November 2025 was a month where the GCC economic data pointed consistently in one direction: expansion. UAE and KSA as the two anchor economies are both growing strongly. Inflation is broadly contained. Capital markets have absorbed global uncertainty without significant distress. And policy decisions, from the UAE budget to the GCC travel initiative, are oriented toward deepening the commercial integration and attractiveness of the region.
For founders and business operators: the regional operating environment entering 2026 is one of the more favourable backdrops the GCC has seen in several years.
Source: Dubai Islamic Bank, Economic Bites Monthly Update, November 2025. Available at dib.ae.
Frequently Asked Questions
What was the UAE PMI in November 2025?
The UAE Purchasing Managers Index (PMI) rose to 54.8 in November 2025, up from 53.8 in October, the fastest pace of non-oil private sector expansion in nearly a year. A PMI above 50 indicates expansion. The jump was driven by stronger new orders, increased output, and significant new hiring. Output growth in November was the joint-fastest in over 18 months.
What was Dubai GDP growth in 2025?
Dubai GDP grew by 4.4% in the first half of 2025, according to the Dubai Islamic Bank November 2025 Economic Bites report. This was driven by the services sector, tourism, and financial activity. The broader UAE GDP was on track for 5.0% full-year growth in 2025, according to the Central Bank of the UAE.
How does UAE PMI compare to other GCC countries?
In November 2025, KSA PMI was the region’s highest at 58.5, followed by UAE at 54.8, Kuwait at 53.4, and Qatar at 51.8. All GCC non-oil private sector PMIs are in expansion territory, above 50, reflecting broad regional commercial momentum.
What is the GCC Schengen announcement about?
In November 2025, a landmark regional mobility announcement was made regarding GCC cross-border movement, comparable in concept to the European Schengen area. This has significant implications for business travel, talent mobility, and regional commercial activity across UAE, KSA, Kuwait, Qatar, Bahrain, and Oman.
What does UAE PMI data mean for businesses considering Gulf expansion?
A UAE PMI of 54.8 (with new orders, output, and hiring all rising) confirms the UAE private sector is in active expansion. For companies evaluating Gulf market entry, this confirms strong underlying demand conditions. PMI data is a leading indicator of commercial health, reflecting what business operators are experiencing in real time, not retrospective GDP figures.
Questions I get asked
What was the UAE PMI in November 2025?
The UAE Purchasing Managers Index (PMI) rose to 54.8 in November 2025, up from 53.8 in October, the fastest pace of non-oil private sector expansion in nearly a year. A PMI above 50 indicates expansion. The jump was driven by stronger new orders, increased output, and significant new hiring. Output growth in November was the joint-fastest in over 18 months.
What was Dubai GDP growth in 2025?
Dubai GDP grew by 4.4% in the first half of 2025, according to the Dubai Islamic Bank November 2025 Economic Bites report. This was driven by the services sector, tourism, and financial activity. The broader UAE GDP was on track for 5.0% full-year growth in 2025, according to the Central Bank of the UAE.
How does UAE PMI compare to other GCC countries?
In November 2025, KSA PMI was the region's highest at 58.5, followed by UAE at 54.8, Kuwait at 53.4, and Qatar at 51.8. All GCC non-oil private sector PMIs are in expansion territory, above 50, reflecting broad regional commercial momentum.
What is the GCC Schengen announcement about?
In November 2025, a landmark regional mobility announcement was made regarding GCC cross-border movement, comparable in concept to the European Schengen area. This has significant implications for business travel, talent mobility, and regional commercial activity across UAE, KSA, Kuwait, Qatar, Bahrain, and Oman.
What does UAE PMI data mean for businesses considering Gulf expansion?
A UAE PMI of 54.8 (with new orders, output, and hiring all rising) confirms the UAE private sector is in active expansion. For companies evaluating Gulf market entry, this confirms strong underlying demand conditions. PMI data is a leading indicator of commercial health, reflecting what business operators are experiencing in real time, not retrospective GDP figures.
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