UAE Economy Soars: IMF Forecasts 4% GDP Growth Amid Structural Reforms

UAE: The UAE’s economy is set to thrive in 2024, with the International Monetary Fund (IMF) forecasting a 4% growth in real GDP and maintaining average inflation at a manageable 2%. This robust economic performance is driven by a surge in tourism, construction, manufacturing, and financial services. The real estate sector is particularly buoyant, fueled by foreign demand, strong bilateral relations, and the UAE’s reputation as a safe haven, all of which are boosting housing and rent prices and significantly enhancing domestic liquidity.

Oil production is also expected to see an uptick as OPEC+ output cuts ease, contributing to the overall economic growth. Despite some geopolitical tensions, their impact has been minimal so far, and the UAE’s swift response to recent flooding has been commendable. High oil prices are likely to keep the country’s fiscal and external surpluses elevated, with the general government surplus anticipated to be around 5% of GDP in 2024.

Public debt is projected to decrease further, approaching 30% of GDP.

The banking sector in the UAE remains robust, with banks possessing substantial capital and liquidity buffers. Asset quality has improved, and credit growth has been resilient despite higher domestic interest rates. The central bank plans to restore the reserve requirements for demand deposits to the historical level of 14%.

Looking ahead, the UAE’s ambitious structural reforms will continue to drive progress. These reforms aim to strengthen governance frameworks, foster private sector development, and promote green growth, ensuring that the nation’s economic momentum is sustained.

Source: IMF