2026 has been one of the most challenging years for businesses in the UAE. The regional conflict disrupted trade, travel and investment, and almost every sector has felt the effects.
What happened to the economy
S&P estimates the UAE economy will shrink by 2.7% in 2026, after growing 6.2% in 2025. The disruption to shipping in the Strait of Hormuz had a knock-on effect across the economy. Export orders fell, and supply deliveries saw their longest delays since the COVID-19 pandemic.
Which sectors were hit hardest
- Tourism and hospitality: Dubai hotel occupancy dropped to about 33% in March, from 84.7% in February.
- Aviation: Dubai International Airport’s passenger traffic fell 31% in the first half of 2026.
- Retail and logistics: These were among the most affected sectors. Tech and construction felt a smaller but still real impact.
- Real estate: Transaction volumes cooled sharply after March, and S&P expects prices and rents to fall this year.
Rising costs
Higher costs for logistics, insurance, fuel, energy and equipment pushed UAE companies to raise prices at the fastest pace in about 11.5 years.
The good news
The UAE entered the crisis in unusually strong shape. The government has announced more than US$680 million in support measures for businesses. Sharjah and Ras Al Khaimah are still expected to grow by about 2% each in 2026.
5 steps to protect your business now
- Forecast cash flow weekly. Know exactly how many months you can operate.
- Review your costs. Cut what doesn’t bring revenue, and renegotiate supplier contracts.
- Check your contracts. Understand your force majeure and payment terms.
- Use government support. Find out which programs your business qualifies for.
- Stay tax compliant. Penalties for missed Corporate Tax or VAT deadlines only add to the pressure.
How UZAQ Finance can help
We provide accounting, tax advisory and CFO services for businesses in the UAE, Kazakhstan and the USA. In uncertain times, clear numbers lead to better decisions.
