GDP In a positive turn, analysts from a leading global bank foresee two more years of robust growth for the UAE. Fueled by export-oriented non-oil sectors, the nation’s economic prospects remain bullish, with a focus on trade, transport, and tourism. The broader service sector is expected to thrive as the population continues to grow, as outlined in the bank’s Middle East 2024 Outlook.
“Key Growth Drivers: Trade, Transport, and Tourism”
Service Sector Strength Amid Population Expansion
The UAE’s growth momentum is set to persist, driven by trade, transport, and tourism, with the service sector performing well. This outlook is bolstered by the nation’s resilient infrastructure, requiring moderate capital outlays compared to other regional players like Saudi Arabia. The exposure to global trends, especially in travel and tourism, adds a layer of dynamism to the growth narrative.
“Economic Projections: Real GDP and Size”
Positive Trajectory for the UAE Economy
MUFG’s research data projects a real gross domestic product (GDP) growth of 4.0% in 2024, following a solid 3.4% growth in 2023. The UAE’s economic size is expected to expand to $536.8 billion in 2024 and surge further to $561.2 billion in 2025.
“Per Capita GDP Surge”
Individual Prosperity on the Rise
Anticipating positive economic expansion, the per capita GDP in the UAE is poised to climb from $50,602 in the previous year to $52,407 in 2024. Further growth is expected, reaching $53,813 in 2025, showcasing prosperity on an individual economic level.
“Government Projections and Financial Landscape”
Central Bank’s Optimistic Revisions and Fiscal Stability
The Central Bank of the UAE has revised its growth projection for 2024 to 5.7%, aligning with increased oil production. The International Monetary Fund (IMF) echoes this positivity, forecasting a 4.0% real GDP growth. The government’s financial prudence is evident in healthy surpluses, significant cash reserves, and potential bond issuance for debt management.
“Structural Reforms and Regional Dynamics”
Underpinned by Transformative Reforms
The cyclical expansion is supported by structural reforms, pushing non-oil growth rates toward five percent. The report emphasizes the UAE’s openness to trade and capital flows, a stance highlighted by its inclusion in the Brics group.
“GCC Economic Stories and Challenges”
Unique Dynamics Across GCC Nations
Examining the broader GCC landscape, the report identifies Saudi Arabia’s compelling economic transformation, Qatar’s positive trajectory driven by gas development, Oman’s nuanced outlook post-institutional reform, Bahrain’s resilience despite challenges, and Kuwait’s potential for gains with improved governance.
In summary, the bank underscores the region’s access to international capital markets, policy flexibility, and resilience, coupled with low inflation, robust public finances, and a strong balance of payments. As external challenges loom in 2024, the report anticipates a divergence in regional economic prospects.
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