The World Bank has revised its growth forecasts for the UAE in 2024 and 2025, citing a robust rebound in oil activity and export growth as key contributors. The latest Global Economic Prospects report anticipates a growth rate of 3.7% in 2024 and 3.8% in 2025, surpassing earlier forecasts by 0.3% and 0.4%, respectively.
UAE’s Resilience Amid Regional Challenges
In December, the UAE Central Bank had already raised the 2024 growth forecast to 5.7%, up from 4.3%, emphasizing the role of increased oil production in driving economic growth. These positive adjustments signal the UAE’s resilience in the face of regional challenges.
GCC Nations Experience Positive Adjustments: World Bank
For the Gulf Cooperation Council (GCC) countries, the World Bank adjusted growth forecasts for 2024 and 2025 by 0.4% and 1.0%, anticipating growth rates of 3.6% and 3.8%, respectively. The expected growth is linked to the projection of increased oil production, bolstering the economies of GCC nations.
Caution on Fiscal Imbalances and OPEC+ Collaboration
The World Bank cautioned that fiscal imbalances may widen in non-GCC oil-exporting countries as expenditures are expected to outpace revenues. The UAE’s collaboration with select OPEC+ countries, announced in November 2023, involves a voluntary cut of 163,000 barrels a day in the first quarter of 2024.
MENA Region Sees Upward Revision
The Middle East and North Africa (MENA) region experienced an upward revision in growth forecasts by 0.2% and 0.5% for 2024 and 2025, reaching a projected growth rate of 3.5%. This adjustment is contingent on geopolitical conflicts not escalating, with expected benefits from the unwinding of oil production cuts in oil-exporting economies.
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