Arab Monetary Fund Forecasts UAE Economy To Grow By 6.2% In 2025

The UAE's economy is forecasted to grow by 3.9 percent in 2024, increasing to 6.2 percent in 2025, according to the Arab Monetary Fund (AMF). The AMF's Arab Economic Outlook report attributes this year's growth to improvements in tourism, real estate, and international trade, along with increased capital spending and support for high-tech industries.

The UAE's economic strength is underpinned by a dynamic non-oil sector and robust public policies aimed at maintaining financial stability. The country’s strategic initiatives focus on enhancing its position as a global trade and finance hub. Continuous infrastructure development and a strong regulatory framework attract foreign investments, fostering innovation and growth in technology-based sectors.

In 2022, the UAE experienced significant economic growth of 7.5 percent. This was driven by an effective response to the COVID-19 pandemic, supportive financial measures, and a business-friendly environment established in previous years. Additionally, there was notable growth in the fuel sector and a substantial recovery in tourism.

The AMF report also projects that Arab economies will see improved growth rates in 2024, reaching about 2.8 percent compared to 0.3 percent in 2023. Economic growth is expected to further improve to 4.5 percent in 2025 due to declining interest rates, controlled inflation, stable oil prices, and steady commodity prices.

Oil-exporting Arab countries are anticipated to benefit from improved energy price levels, positively impacting their economic growth in the coming years. These countries are projected to witness a growth rate of 3.7 percent in 2024, rising to 5.1 percent in 2025.

Country-Specific Growth Rates

The Kingdom of Saudi Arabia’s economy is estimated to grow by 4.4 percent in 2024 and 5.7 percent in 2025. Meanwhile, Qatar's economy is expected to expand by about 1.8 percent in 2024 and 3.1 percent in 2025.

Kuwait's economy is projected to grow by 2.7 percent by the end of this year, increasing to 3 percent next year. The Sultanate of Oman’s economy is anticipated to achieve growth rates of 2.3 percent and 2.7 percent for the years 2024 and 2025 respectively.

Bahrain’s economy is estimated to grow by 3.5 percent in 2024 and slightly decrease to a growth rate of 3.2 percent in the following year.

The UAE achieved a positive growth rate of about 3.6 percent last year due to strong fundamentals supported by dynamic non-oil sectors and robust public policies aimed at maintaining economic development.

The report highlights that the UAE's continued efforts include developments in high-tech industries which contribute significantly towards its economic stability.

Overall, the AMF report underscores that strategic initiatives such as infrastructure development and regulatory frameworks play crucial roles in attracting foreign investments into the UAE.

With inputs from WAM