UAE Economic Growth To Accelerate, Reaching 6.2% In 2025: CBUAE Report

The Central Bank of the United Arab Emirates (CBUAE) anticipates continued robust foreign trade performance for the country in 2024 and 2025. The bank projects the UAE’s real GDP to grow by 3.9 percent in 2024, accelerating to 6.2 percent in 2025. Non-hydrocarbon GDP growth is expected to remain strong at 5.4 percent in 2024 and 5.3 percent in 2025.

In the fourth quarter of 2023, the UAE economy expanded by 4.3 percent year-on-year, surpassing the 2.5 percent growth recorded in Q3 2023. This increase is attributed to accelerated non-hydrocarbon growth, which constitutes approximately 75 percent of GDP, and improved hydrocarbon sector performance.

The consolidated fiscal balance for 2023 remained positive at AED85.6 billion, equivalent to 4.5 percent of GDP. Total revenue declined by 13.9 percent to AED526.1 billion (27.9 percent of GDP), while government expenditure increased by 3.1 percent to AED440.5 billion (23.3 percent of GDP). The fiscal sector is expected to strengthen further due to the recently introduced corporate income tax.

Indicators point towards robust economic activity within the non-oil private sectors, according to CBUAE. As of April 2024, the UAE's Purchasing Managers' Index (PMI) was reported at 55.3, driven by continued business optimism on economic prospects and expectations of ongoing robust demand and sales.

Dubai recorded a PMI of 55.1 in April 2024, reflecting persistent growth in the emirate's non-oil private sector. Employment and wage growth also showed positive trends, with a 7.5 percent increase in employees covered by the CBUAE Wage Protection System (WPS) and a 9.4 percent rise in average employee salary year-on-year in April 2024.

The real estate, tourism and hospitality, and transportation sectors collectively represent around 30 percent of the non-oil GDP. Residential real estate sales transactions in Abu Dhabi increased by 7.7 percent year-on-year from January to April 2024, driven mainly by a 24.9 percent rise in sales of ready units.

Dubai sustained its role as a top international tourism hub in Q1 2024, with hotel occupancy rates at 83 percent and an average stay duration of 3.9 nights per visitor. The emirate saw an 11 percent rise in tourist arrivals during this period compared to the same timeframe last year, welcoming 5.2 million international overnight visitors.

Zayed International Airport welcomed over 6.8 million passengers in Q1 2024, benefiting from its newly opened terminal in Abu Dhabi, marking a 36 percent increase compared to Q1 2023. Dubai International Airport had its busiest quarter ever at the start of 2024, with passenger traffic rising by 8.4 percent year-on-year to reach 23 million travellers.

Future Developments

Dubai approved an ambitious AED128 billion project for a new passenger terminal at Al Maktoum International Airport, aiming to increase its capacity to handle up to 260 million passengers annually. This expansion will make it the largest airport globally by size and capacity.

With inputs from WAM