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The International Monetary Fund (IMF) projected that the UAE’s GDP growth will remain at 4 per cent in 2024 and increase to 5.1 per cent in 2025 as the Gulf state is experiencing robust economic growth, according to the fund’s latest World Economic Outlook (WEO) Report released on Tuesday.
Earlier in May, the IMF’s delegation noted in its latest Article IV end-of-mission statement that economic growth in the UAE was broad-based and driven by solid domestic activity in sectors such as tourism, construction and financial services.
The UAE, one of the world’s top oil exporters, is actively diversifying its economy and attracting foreign investment. Non-oil GDP now accounts for more than 70 per cent of its total GDP. The IMF said in May that increased public and private investment, along with structural reforms in areas such as renewable energy and technology, could further boost economic growth beyond initial projections.
The fund forecasted that overall economic growth would likely be further supported by higher hydrocarbon GDP growth in 2024, in part driven by higher crude oil production from the UAE’s OPEC+ quota increase.
“The UAE’s ambitious structural reform agenda should continue to be supported by integrated government strategies, deliver strong governance frameworks, and promote private sector development and green growth,” the IMF said in a statement in May.
Meanwhile, the IMF’s WEO report, which was released on the sidelines of the 2024 IMF/World Bank Group Annual Meetings, forecasted that the Middle East and Central Asia economies will grow by 2.4 per cent and 3.9 per cent in 2024 and 2025, respectively.
The IMF revised its GDP growth forecast for Saudi Arabia downwards to 1.5 per cent in 2024 while projecting that the economy will expand by 4.6 per cent in 2025. The fund lowered its GDP projections for Saudi Arabia’s 2024 GDP by nearly a percentage point from its April estimates to 1.7% in July.
“Compared with that in April, the projection has been revised downward by 0.4 percentage point for 2024, mainly the result of the extension of oil production cuts in Saudi Arabia and ongoing conflict in Sudan taking a large toll,” the IMF said in its WEO report.