This study conducted a detailed analysis of water resource management in Abu Dhabi, projecting the region’s water demand and supply amidst rapid urbanization and demographic shifts. This research incorporated historical data on population dynamics, water consumption, temperature fluctuations, and groundwater availability to forecast future scenarios in Abu Dhabi. In the study area, Abu Dhabi Distribution Company (ADDC) currently serves 341,162 registered customers, with anticipated significant growth in the industrial and commercial sectors over the next decade. A novel framework for water demand forecasting was utilized, employing historical trends and a refined Vector Autoregressive (VAR) model, which predicts demand and supply patterns in the study area until 2060. The research objectives were to forecast water demand and evaluate the sustainability of water resources under current consumption trends and demographic growth. By integrating historical data on population dynamics, water consumption, temperature variations, and groundwater availability, we developed a comprehensive model that allows for robust scenario planning. The model predicts that by 2050, the estimated water usage will be 875.1 Million Imperial Gallons per Day (MIGD), while the amount of groundwater available will be 474.5 km3. By 2060, water consumption is expected to rise to 994.9 MIGD, with available groundwater resources declining to 416.5 km3. Integrating demographic trends with modeling techniques allows decision-makers to comprehend water demand patterns more comprehensively, make informed decisions on water resource allocation, and formulate effective water management strategies. These findings transcend Abu Dhabi, offering a valuable framework for arid regions globally facing analogous water resource management challenges and promoting data-driver approaches for regions with limited water resources.