World Bank Raises UAE GDP Growth Projections For 2024 And 2025

The World Bank has recently updated its economic forecasts for the United Arab Emirates (UAE), indicating a positive outlook for the country's economy in the coming years. According to the latest economic developments report for the Middle East and North Africa (MENA) region, the UAE's real Gross Domestic Product (GDP) growth is now expected to reach 3.9% in 2024, an increase from the previously forecasted 3.7%. Furthermore, the forecast for 2025 has been adjusted upwards to 4.1% from an earlier prediction of 3.8%.

This optimistic projection is accompanied by an anticipated rise in the UAE's current account surplus, which is estimated to climb to 8.4% in 2024 and slightly decrease to 8.3% in 2025. Additionally, the nation is on track to achieve a fiscal balance surplus of 5.1% by the end of this year and 4.8% in the following year.

When examining the broader MENA region, the World Bank's report presents a mixed picture. The region is expected to experience a growth rate of 2.7% in 2024, which signals a return to the modest growth levels observed in the decade prior to the global pandemic. However, a more robust growth rate of 4.2% is forecasted for 2025.

The Gulf Cooperation Council (GCC) economies, which include Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates, are set to see an improvement in their growth rates as well. These countries are projected to grow by 2.8% in 2024 and by an impressive 4.7% in 2025. This anticipated growth is largely attributed to increased oil output following the phasing out of production cuts and strong performance in the non-oil sector due to ongoing diversification efforts and reforms.

Another positive indicator is the expected increase in MENA's GDP per capita growth. After a modest rate of growth in 2023 at 0.5%, GDP per capita is forecasted to grow by 1.3% in 2024. This improvement is primarily driven by the GCC economies, where GDP per capita growth is projected to reach 1.0% in 2024, marking a significant recovery from a decline of 0.9% in GDP per capita observed in 2023.

The World Bank's revised forecasts underscore the resilience and potential for growth within the UAE and GCC economies despite global economic challenges. With strategic diversification efforts and reforms continuing to bear fruit, these regions are well-positioned for sustained economic expansion in the years ahead.

With inputs from WAM