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War in Levant may end in H1 2025, UAE will lead Gulf’s growth: BMI

The non-oil sector in the UAE is expected to grow by 6% due to increased private consumption and stronger investment activity

The United States President-Elect Donald Trump’s intention to extend the Abraham Accords is anticipated to play a role in whether the Israel-Hamas conflict continues, and whether the war in the Levant is probably going to end in the first half of 2025.

Although there will still be conflict in the area in H1, according to analysis from BMI, a division of Fitch Solutions, the incoming United States president is eager to put an end to the war as a top priority, and there is hope that the recent ceasefire in Lebanon will serve as a foundation for ending the war in Gaza.

The GCC’s real GDP is expected to grow at a rapid rate in 2025, from 1.8% in 2024 to 4.3%.

According to Roman Moubarak, head of MENA country risk and global banking, the United Arab Emirates (UAE) will lead growth in the GCC at 5.2%, followed by Saudi Arabia at 4.7%.

Both economies are continuing to concentrate on diversification plans, strengthening trade ties with Mainland China and India, and increasing investment in industries like technology, manufacturing, and aerospace.

The oil economy is expected to recover from a contraction in 2024 as OPEC+ lifts supply restrictions in the second half of 2025, while the non-oil sector in the UAE is expected to grow by 6% due to increased private consumption and stronger investment activity.

Overall, Dubai’s growth will be 3.5%, while Abu Dhabi’s will be 5.6%. Although there are three possible outcomes, BMI is assuming that the war will end in 2025.

According to the base case, there is a 75% chance that the war will continue for the first six months, with Israel and Iran experiencing flare-ups and regional instability being contained. The second, with a 20% chance, is that the Levantine war ends sooner than anticipated.

The third, which has a 5% chance, is that Iran, Israel, and possibly the United States will be involved in a protracted conflict. This could include the Houthis in Yemen and other groups supported by Iran in Syria and Iraq.

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