IMF Predicts UAE GDP Growth of 4 Percent in 2024
In a recent report, the International Monetary Fund (IMF) has forecasted that the UAE’s gross domestic product (GDP) will expand by 4 percent this year. This growth is expected to be driven by strong domestic activities and relatively high oil prices.
Robust Growth in Domestic Sectors
The IMF’s latest Article IV end of mission statement highlights the UAE’s strong growth in domestic sectors such as tourism, construction, and financial services. The report also mentions that the country’s oil GDP will expand if OPEC+ decides to ease previously proposed output cuts.
Broad-Based Economic Growth
According to the IMF, economic growth in the UAE is broad-based, with robust activity in sectors like tourism, construction, manufacturing, and financial services. The country’s safe haven status and increased bilateral and multilateral ties are contributing to rapid growth in housing prices and rents.
Positive Economic Outlook
The IMF projects that the UAE’s economy will grow by 4 percent in 2024, up from the previous estimate of 3.5 percent. The country’s fiscal and external surpluses are expected to remain high, with the general government surplus projected to be around 5 percent of GDP.
Challenges and Risks Ahead
Despite the positive outlook, the IMF notes that the UAE’s economic growth is subject to uncertainty and external risks, including geopolitical tensions and commodity price volatility. The report emphasizes the importance of gradual fiscal consolidation and structural reforms for the country’s economic sustainability.
Financial Sector Resilience
The IMF also highlights the resilience of banks in the UAE, with considerable capital and liquidity buffers. Credit growth remains strong despite higher domestic interest rates, and efforts to digitalize the financial system are encouraged.
Conclusion
Overall, the IMF’s report underscores the UAE’s strong economic performance and outlines key areas for continued growth and stability. By addressing challenges and implementing structural reforms, the country can ensure its economic prudence and long-term sustainability.