Dr. Jihad Azour, director of the Middle East and Central Asia Department at the International Monetary Fund (IMF), has stated that the economic growth of the UAE is expected to outpace other Gulf Cooperation Council (GCC) countries in 2025, primarily fueled by the non-oil sector. In remarks made to Emirates News Agency (WAM) during a conference organized by the Dubai International Financial Centre (DIFC) in partnership with the IMF, titled “Regional Economic Outlook for the Middle East and Central Asia – October 2024,” Dr. Azour indicated that the UAE’s non-oil sector is projected to experience growth rates between 4 percent and 5 percent in 2025. He emphasized that this strong growth highlights the effectiveness of the country’s economic policies.
Adaptability amid global challenges
Dr. Azour praised the UAE’s ability to adjust to global economic and geopolitical changes, pointing out its role as a critical hub between major economic blocs and a center for international events. He noted that, despite facing global challenges, the UAE economy has shown remarkable adaptability and utilized modern technology to thrive, which allows the country to maintain high growth rates.
Factors supporting economic outlook
He outlined various factors that support the UAE’s positive economic outlook, including investments in digital and technological sectors, renewable energy, and green initiatives, along with the UAE’s strategy of diversifying investment sources and promoting climate sustainability. Dr. Azour mentioned that the UAE’s economy has undergone considerable transformation in recent years due to global dynamics, emphasizing that the COVID-19 pandemic, a significant challenge, has strengthened the UAE’s adaptability and resilience. He added that by embracing advanced technologies, the UAE has enhanced its services, which boosts competitiveness and solidifies its position as a global economic and financial hub.
Attractiveness for global investors
Furthermore, he highlighted that the UAE has enhanced its reputation as a premier destination for global investments through significant commitments in promising sectors like technology, technological infrastructure, and renewable energy. He explained that major economic events, including Expo 2020 Dubai and the upcoming COP28 climate conference, also contribute to this heightened attractiveness.
Dubai as strategic investment hub
Dr. Azour pointed out that the UAE, particularly Dubai, has emerged as a secure haven for investors and a strategic planning location, emphasizing that investment in promising sectors will be crucial for advancing the economies of both the UAE and Dubai, unlocking new opportunities.
Regional economic landscape variations
Regarding the broader Middle East region, Dr. Jihad Azour explained that the economic landscape differs across countries based on their economic structures. He emphasized that the current focus should be on bolstering economic stability and enhancing medium-term growth prospects. Dr. Azour reaffirmed the IMF’s commitment to supporting economies in the Middle East and North Africa, noting that the Fund has allocated $13.4 billion in funding to the region, including Pakistan, this year. He projected a slight improvement in economic growth for 2025, anticipating that the growth rate will rise from an average of 2.1 percent this year to 4 percent next year.
Read more: UAE’s real GDP expected to expand by 5.1 percent in 2025, according to IMF
Recent agreements with IMF
In a recent development, the UAE Ministry of Finance (MoF) announced that the country has entered into two agreements with the International Monetary Fund (IMF) aimed at financing the Poverty Reduction and Growth Trust (PRGT) and the Resilience and Sustainability Trust (RST). These agreements were formalized during the annual meetings of the World Bank Group (WBG) and the IMF in Washington, D.C., where the UAE delegation remained until October 26.
Leading the UAE delegation was Mohamed Hadi Al Hussaini, the UAE Minister of State for Financial Affairs. The team comprised senior officials from the Central Bank of the UAE (CBUAE) and the Ministry of Finance, including Ibrahim Al Zaabi, Assistant Governor for Monetary Policy and Stability at CBUAE, and Ahmed Al Qamzi, Assistant Governor for Banking and Insurance Supervision at CBUAE. Also present were Ali Abdullah Sharafi, Acting Assistant Under-Secretary for International Financial Relations at the MoF; Hamad Essa Al Zaabi, Director of the Office of the Minister of State for Financial Affairs; and Thuraya Hamed Al Hashemi, Acting Director of Relations and International Financial Organizations at the MoF, along with various specialists.
Commitment to global development goals
During the October 2023 meeting of the International Monetary and Financial Committee (IMFC) held in Marrakech, Morocco, as part of the IMF and WBG meetings, the UAE announced a significant initiative to co-finance the PRGT, committing $200 million (AED735 million). This pledge, as reported by WAM, is part of the UAE’s strategy to enhance concessional lending to low-income countries, aligning with the first objective of the United Nations Sustainable Development Goals (SDGs), which seeks to eradicate poverty and address various global challenges for a more sustainable future.
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