Riyadh: UAE Economy Set for Strong Growth, Central Bank Predicts
The UAE’s economy is on an upward trajectory, with the nation’s central bank forecasting a significant 5.2 percent growth in GDP by 2025. This positive outlook comes after the Central Bank of the UAE projected a 4.2 percent rise in GDP for 2024, with an even faster acceleration to 5.2 percent the following year.
The bank’s quarterly economic review for the fourth quarter of 2023 reveals a predicted 4.7 percent increase in non-oil GDP for both 2024 and 2025. Oil GDP growth is also expected to see a jump from 2.9 percent in 2024 to 6.2 percent in 2025.
In terms of fiscal balance, the UAE showed strength in the first nine months of 2023, boasting a surplus of 61 billion dirhams ($16.6 billion), equivalent to 4.4 percent of GDP. Total revenues of around 370 billion dirhams and expenditures of approximately 309 billion dirhams further support the nation’s financial health.
The introduction of a federal corporate tax is anticipated to enhance revenue diversification beyond the oil sector, boosting government finances. The non-oil private sector also continues to demonstrate resilience, with a Purchasing Managers’ Index of 56.6 in January reflecting ongoing business confidence and economic dynamism.
The CBUAE’s projections for economic growth in the UAE differ from the more conservative figures put forth by the World Bank, which sets the country’s real GDP growth at 3.4 percent for 2023, gradually increasing to 3.7 percent in 2024 and 3.8 percent in 2025.
Looking at the broader regional outlook, Saudi Arabia is forecasted to see a 4.1 percent growth in 2024, with similar modest growth projections for Kuwait, Bahrain, Qatar, and Oman. The UAE’s economic resilience and diversification efforts are expected to remain strong, driven by production expansion and investment in new projects.