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Wednesday, February 28, 2024

UAE economic outlook remains positive with 3.6% GDP growth in 2023


The International Monetary Fund (IMF) said in a statement on Monday that the economic outlook remains positive due to strong domestic economic activity, with the UAE’s gross domestic product (GDP) projected to grow by 3.6% in 2023.

Non-hydrocarbon GDP is expected to grow by 3.8% due to continued tourism activity and higher capital spending.

However, the outlook is subject to significant global uncertainties, including weaker growth, tightening financial conditions and geopolitical developments. The implementation of the UAE’s intensified reform efforts poses an upside risk to growth over the medium term, the IMF said.

Inflation is rising in line with global trends, but may fall to 3.4% by 2023.

Fiscal and external surpluses are expected to remain high, and banks are generally well capitalized and liquid, thanks to higher oil prices, the IMF said. However, non-performing loans remain stubbornly high, albeit down from recent peaks, and real estate prices have risen sharply in some areas.

The IMF noted that progress on the Comprehensive Economic Partnership Agreement (CEPA) will boost trade and global value chain integration and attract foreign direct investment.

(Editing by Saipan Scalia seban.scaria@lseg.com)


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