The UAE’s non-oil economy is expected to grow by 4.7 percent in 2024, indicating that the UAE’s diversification and fiscal surpluses show a great ability to adapt to any global challenges, stated Michael Bolliger, CIO of global emerging markets, UBS Global Wealth Management recently. Bolliger added that the UAE’s non-oil economy is heading towards sustainable growth, driven by booming tourism and real estate sectors, increased government spending on capital projects, and strong inflows of foreign direct investment (FDI).
“Oil GDP is expected to grow by 4.2 percent in 2025, and the UAE economy will continue its growth momentum and maintain its positive trajectory in the coming years,” he added.
Real estate and tourism propel growth
In a statement to WAM, Bolliger also noted that the UAE’s real estate sector is expanding, with residential sales up by 60 percent and mortgage applications increasing thanks to low interest rates.
The easing of visa procedures and business ownership laws has boosted the influx of businesses and tenants, supporting investment in commercial property in Dubai and Abu Dhabi. In addition, the construction sector remains one of the main drivers of the non-oil economy, supported by the UAE government’s continued investment in infrastructure projects.
Bolliger noted that the UAE’s tourism sector is also experiencing significant growth and that Dubai’s tourism sector has recovered to pre-pandemic levels, with significant growth in international visitor numbers since the beginning of the year.
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GDP growth to exceed 5 percent by 2025
In an earlier statement, Bolliger said that the UAE’s GDP growth will likely exceed 5 percent by 2025. Bolliger noted that this positive growth forecast aligns closely with recent predictions from the IMF, which has maintained its GDP growth estimate for the UAE at 4 percent for 2024 and anticipates an increase to 5.1 percent in 2025.
Several global factors influence growth expectations for Gulf Cooperation Council (GCC) economies, particularly oil production and OPEC decisions. Encouraging elements such as stimulus measures from China, adjustments in monetary policy, and cuts to the reserve requirement rate will likely drive markets and the global economy toward recovery.
These factors will significantly impact the UAE’s economic performance, both directly and indirectly, with expectations for the UAE economy to maintain its growth momentum and continue on an upward path.
In a separate forecast last month, the Central Bank of the UAE (CBUAE) estimated that the country’s real GDP would grow by 3.9 percent in 2024 and 6.2 percent in 2025. The central bank further anticipates strong performance in international trade throughout 2024 and 2025.
According to the CBUAE’s June 2024 Economic Quarterly Review, the non-oil economy will remain robust at 5.4 percent in 2024 and 5.3 percent in 2025.
Last month, the World Bank forecasted that the UAE’s gross domestic product (GDP) will rise to 3.3 percent in 2024, followed by growth of 4.1 percent in both 2025 and 2026. The report credited the anticipated growth next year to a rebound in oil production and stable external conditions.
