The UAE has set a balanced federal budget of AED92.4bn for 2026, a 29% jump in both revenue and spending, underpinned by new tax measures and an expected uplift from hydrocarbons.[3] The plan channels funds towards social services and strategic investments aligned with the ‘We the UAE 2031’ vision.[3] Alongside higher hydrocarbon production and exports as OPEC-led cuts unwind, this should support stronger domestic demand and investment.[3]

His Highness Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum…said the UAE Federal Government Budget for 2026 will accelerate efforts to realise the leadership’s vision of **building a sustainable future** centred on investing in people, enhancing quality of life and reinforcing long-term financial sustainability.[7] The federal budget maintains fiscal balance…with revenues and expenditures both reaching AED92.4 billion…representing an increase of nearly 29%.[7] The budget allocates AED30.8 billion to the public services sector, AED16.9 billion to education, AED5.7 billion to healthcare, and AED3.7 billion to housing; no specific allocation is described as directly reducing government dependence on fossil fuel revenues.[7]

H.H. Sheikh Maktoum’s remarks came following the UAE Cabinet…which approved the Federal Budget Plan for the fiscal year 2026 amounting to AED 92.4 billion, a 29% increase from AED 71.5 billion in 2025.[2] The 2026 budget is the largest in the UAE’s history…It falls under the umbrella of the 2022–2026 Federal General Budget Plan, amounting to AED 347 billion.[2] Allocations include AED 34.6 billion to social development and pensions (37%), AED 27.1 billion to government affairs (29%), AED 15.4 billion to financial investments (17%), AED 12.7 billion to federal expenses (14%), and AED 2.6 billion (3%) to infrastructure and economic development; the statement does not say that these measures will reduce the government’s dependence on fossil fuels.[2]

Growth is projected to accelerate further to 4.8% in 2026, underpinned by a rebound in oil output and sustained momentum in non-hydrocarbon activities.[4] The UAE has demonstrated strong resilience amid global uncertainty, regional conflicts, and lower, more volatile oil prices. Output growth has been driven by robust performance in non-hydrocarbon sectors, mainly in financial and insurance services, construction and manufacturing, which grew by 6.1% Y-o-Y.[4] A projected moderation in oil GDP growth in 2027, together with sustained growth in non-oil activities, could lead to more balanced sources of growth.[4]

The Federal Government has a long-term strategy of diversifying the UAE's economy away from its reliance on oil and gas and a long-term vision to turn the UAE into a knowledge-based economy and reduce its dependence on the oil sector.[2] However, there can be no assurance that the UAE's efforts to diversify its economy and reduce its dependence on oil will be completely successful.[2] The UAE's economy is highly dependent on the oil industry; the mining and quarrying sector, which includes crude oil and natural gas, accounts for a significant share of GDP.[2]

The federal budget for the year 2024 is AED 64.060 billion…The federal budget for the year 2025 totals AED 71.5 billion in revenues and AED 71.5 billion in estimated expenditures, maintaining a balanced approach between income and spending.[10] This page outlines the size and balance of the UAE federal budgets for 2024 and 2025 and references the approval of the Federal General Budget 2024–2026 of AED192 billion, but it does not state that the 2026–2027 federal budgets are intended to reduce the government’s dependence on fossil fuels.[10]

The federal budget continues to maintain fiscal balance for the second consecutive year, with revenues and expenditures both reaching AED 92.4 billion, compared to AED 71.5 billion in the 2025 budget, marking an increase of nearly 29%. Al Hussaini explained that financial sustainability is a strategic approach that focuses primarily on improving financial planning, managing spending more carefully, diversifying sources of revenue, strengthening public debt management and expanding partnerships between the public and private sectors. These efforts, he said, are designed to support continued growth and maintain fiscal balance and strengthen the national economy’s ability to preserve its stability and resilience. The spending priorities of the 2026 federal budget reflect a commitment to supporting vital sectors that directly impact the wellbeing of the community, including allocations to public services, education, healthcare, housing, economic affairs and other sectors. The statement does not provide a detailed breakdown of oil versus non-oil revenue shares in the 2026 budget but emphasises diversification of revenue sources as part of the strategy.

The UAE economy’s robust growth is estimated to peak in 2026 at +5.2% y/y, and to continue growing closer to +4% in 2027.[6] The UAE’s non-oil sector, more diversified than the rest of the region, expanded solidly through 2025; growth is being driven mainly by non-oil activities such as manufacturing, finance, construction and real estate.[6] The UAE’s fiscal breakeven oil price, the price at which the fiscal account is balanced, decreased to below USD60 per barrel in November 2025 from USD73 per barrel in July, reflecting stronger non-oil revenues and fiscal buffers.[6]

On October 27, 2025, the Cabinet of the United Arab Emirates (UAE) approved the federal budget for 2026, marking the largest financial plan in the nation’s history.[1] The government intends to finance this through **revenues generated from corporate income tax, increased hydrocarbon income, and dividends from the Emirates Investment Authority**.[1] This description explicitly notes that higher hydrocarbon (oil and gas) income is a key source of financing for the 2026 federal budget, indicating continued reliance on fossil-fuel-based revenues rather than a reduction in dependence.[1]

Non-oil activity now makes up more than three-quarters of the economy, and FDI reached AED167.6 billion last year.[10] New CEPAs, pro-investment rules, and initiatives under the ‘We the UAE 2031’ vision aim to further diversify away from hydrocarbons, with trade, tourism, logistics, and manufacturing positioned as key growth engines.[10] The report highlights that while oil remains important, the policy focus is increasingly on non-oil sectors and attracting investment into knowledge-based industries.[10]

The UAE Cabinet approved on Monday the federal annual budget for 2026 with estimated revenues of AED92.4 billion ($25.16 billion) and similar, balanced expenditures. This marks a significant increase compared to the previous year’s budget. Media coverage of the approval highlights the alignment of the 2026 budget with the "We the UAE 2031" vision and broader economic diversification goals, including investment in social services and strategic sectors. However, the brief social media post and derivative reporting do not detail the composition of revenue sources by oil versus non-oil categories, focusing mainly on total figures and strategic aims.

The UAE Federal Budget 2026… the UAE Cabinet approved the AED 92.4 billion Federal Budget 2026 — the largest in the Union’s history, up 29% from 2025.[5] Breakdown: • AED 34.6 b (37%) – Social Development & Benefits • AED 27.1 b (29%) – Government Affairs • AED 15.4 b (17%) – Financial Investments • AED 12.7 b (14%) – Federal Services • AED 2.6 b (3%) – Infrastructure & Economic Development.[5] The post frames the budget as supporting diversification, noting “Non-oil exports doubling since 2019 reflect true diversification — economic strength now anchored in global trade corridors, not commodities.”[5]

On 27 October 2025, the UAE Cabinet approved the largest federal budget in the nation’s history, allocating **AED 92.4 billion for 2026**.[8] Fully aligned with *We the UAE 2031*, the announcement reinforces the country’s long‑term commitment to **economic diversification, human capability development, and innovation‑driven growth**.[8] This commentary links the 2026 federal budget to broader diversification and innovation goals but does not specifically state that the budget will reduce the government’s dependence on fossil fuels or fossil-fuel revenues.[8]

Breakeven Fiscal Oil Price for United Arab Emirates was 49.95163 US $ per barrel in January of 2025, according to the United States Federal Reserve. Historically, Breakeven Fiscal Oil Price for United Arab Emirates reached a record high of 53.89980 in January of 2024 and a record low of 49.95163 in January of 2025. The breakeven fiscal oil price indicates the oil price at which the government’s budget is balanced, reflecting continued fiscal sensitivity and dependence on oil revenues; there is no indication here that the 2026–2027 federal budget eliminates or substantially reduces this dependence.

The World Bank expects non-oil activities to expand by 5.2% on average in 2026–2027, underpinning medium-term growth in the UAE.[7] Oil sector growth is projected to recover to 3.9% in 2025 and rise further to an average of 4.5% in 2026–2027, as production increases under the OPEC+ framework.[7] The report noted that “The country stands out for its diversified economy, with balanced growth between non-oil and oil sectors,” and stated that non-oil GDP reached 77.8% of GDP in 2024, supported by strong performance in trade, tourism and real estate.[7]

UAE 2026 Federal Budget: Stronger Growth & Strategic Investment The UAE has set a balanced AED92.4bn budget for 2026, a 29% increase in both revenue and spending, supported by **new tax measures and higher hydrocarbon revenues**.[5] The plan prioritizes social services and strategic investments in line with the ‘We the UAE 2031’ vision.[5] This short analysis again emphasizes that higher hydrocarbon revenues are supporting the 2026 federal budget and does not frame the budget itself as a mechanism to reduce dependence on fossil fuels.[5]

The UAE stands out among much of its OPEC brethren due to its lower fiscal breakeven oil price. In fact, amongst oil-exporting countries, the UAE’s prudent fiscal policy framework and diversified non-oil revenue base have allowed it to maintain relatively low breakeven levels. At the same time, oil and gas still play a crucial role in government revenues and the broader economy. Deutsche Bank Research notes ongoing diversification but does not claim that the specific federal budget for 2026–2027 will reduce the government’s dependence on fossil fuels; rather, the UAE remains an oil-exporting economy with fiscal exposure to hydrocarbons.

The UAE posted 2.1 percent hydrocarbon GDP growth despite crude oil production cuts, thanks to the country's natural gas exports.[9] The World Bank’s Gulf Economic Update notes that non-oil activities have become the main driver of growth, with services, manufacturing, and construction expanding as part of diversification strategies.[9] At the same time, hydrocarbon revenues remain an important source for fiscal and external balances, meaning that budgets are still influenced by oil and gas price dynamics.[9]

The UAE’s economy has entered 2026 with solid momentum, putting it on track to meet its growth targets. The non-oil GDP rose 5% to AED 1.342 trillion, while oil activities contributed AED 434 billion, according to the Federal Competitiveness and Statistics Centre. This data shows growing non-oil output but also continued substantial contribution from oil activities; there is no mention that the federal budget for 2026–2027 will itself reduce the government’s dependence on fossil fuels, only that the broader economy is diversifying.

In October 2024, the UAE cabinet approved a balanced budget for 2025, with expenditures set at $19.5 billion – a nearly 12% increase from 2024.[6] …There remains continued scrutiny over its **fossil fuel dependency** and questions about how to successfully balance economic growth with its climate commitments.[6] This 2026 country report notes ongoing concerns over the UAE’s dependence on fossil fuels and discusses the federal budget for 2025, but it provides no evidence that the 2026–2027 federal budgets will reduce that dependence.[6]

The Federal Government has a long-term strategy of diversifying the UAE’s economy away from its reliance on oil and gas.[2] A related analysis observes: “Hydrocarbon revenues are expected to contract by almost half from $102.50B (67.92% of total revenues) in 2014 to $61.12B (55.81% of total revenues) in 2015,” reflecting initial moves toward a lower share of oil in fiscal revenues.[1] Dubai specifically is moving forward with its diversification strategy away from oil as several mega projects are in the pipeline along with newly implemented legislations to support private investments and infrastructure expansion.[1]

S&P Global Ratings notes that Ras Al Khaimah and Sharjah are economically more diversified compared with some other emirates.[8] It expects growth of about 2% for each in 2026, supported by non-oil sectors.[8] The broader UAE is described as pursuing diversification and adapting to the effects of regional conflict, but hydrocarbon revenues still play a key role in fiscal strength and external positions.[8]

Policy documents and official statements since the launch of the ‘We the UAE 2031’ vision consistently emphasize economic diversification, expansion of non-oil revenues, and development of knowledge-based sectors such as technology, tourism, logistics, and advanced manufacturing.[10] However, federal and emirate-level budgets remain closely linked to hydrocarbon price and production assumptions, and the UAE continues to be classified in most international reports as a hydrocarbon-rich economy where oil and gas revenues are a major component of government income.[2]