The Central Bank of the United Arab Emirates (UAE) forecasts a healthy 5.2% increase in the country’s gross domestic product by 2025, providing favourable economic outlooks.
The UAE Central Bank projects that the GDP of the nation will increase by 4.2% in 2024 and then by 5.2% in 2025. This growth estimate is a follow-up to the bank’s 2023 expansion estimate of 3.1%.
A breakdown of the anticipated change is given in the CBUAE quarterly economic review for the fourth quarter of 2023, which projects a 4% increase in non-oil GDP in 2024 and 2025.
Similar projections for oil GDP growth indicate that it will grow by 2.9% in 2024 and then by 6.2% in 2025.
In terms of finances, the UAE demonstrated a strong fiscal balance during the first nine months of 2023, reporting a surplus of 61 billion dirhams (USD 16.6 billion), or 4.4% of GDP. Total revenues of about 370 billion dirhams offset total expenses of about 309 billion dirhams to sustain this financial stability.
The report went on to say that a federal corporation tax is anticipated to strengthen government finances even more by increasing revenue diversification outside of the oil industry.
Furthermore, as demonstrated by a Purchasing Managers’ Index of 56 points in January 2024, which reflects ongoing business confidence and economic dynamism fuelled by stable demand and sales, the CBUAE study shows sustained strength in the non-oil private sector.
These elements are anticipated to support continued production growth and project investment, bolstering the UAE’s attempts to diversify and strengthen its economy.
The more cautious estimates made by the World Bank do not match the apex bank’s forecasts for the UAE’s economic growth.
The UAE’s real GDP growth is expected to be 3.4% in 2023, 3.7% in 2024, and 3.8% in 2025, according to the World Bank’s Global Economic Prospects report.
A broader regional outlook outlines specific projections for other Gulf countries, with Saudi Arabia expected to grow by 4.1% in 2024 and Kuwait, Bahrain, Qatar, and Oman expected to grow at similar modest rates.