Arab Monetary Fund Projects 6.2% Growth for UAE Economy by 2025
The Arab Monetary Fund (AMF) anticipates that the United Arab Emirates (UAE) economy will experience a growth of 3.9 percent in 2024, with a further acceleration to 6.2 percent in 2025.
In its latest Arab Economic Outlook report, the AMF attributes the projected growth for this year to sustained enhancements in sectors such as tourism, real estate, and international trade. Other contributing factors include increased capital investments and persistent efforts to bolster the economy, with a particular emphasis on the burgeoning high-tech industry.
The report highlights that the UAE’s economy is underpinned by robust fundamentals, a vibrant non-oil sector, and effective public and monetary policies aimed at fostering economic development, ensuring financial stability, and maintaining the soundness of the financial system.
The UAE’s strategic initiatives to establish itself as a global trade and finance hub, ongoing infrastructure development, a strong regulatory framework to attract foreign investments, and a focus on innovation and technology-driven sectors are pivotal to its growth trajectory.
In 2022, the UAE experienced notable economic growth of 7.5 percent, driven by an effective response to the COVID-19 pandemic, supportive financial measures, and the creation of a business-friendly environment. This period also saw substantial growth in the fuel sector and a remarkable recovery in tourism, achieving a growth rate of around 3.6 percent in the following year.
The AMF’s report also forecasts an improvement in the growth rate of Arab economies as a whole, from 0.3 percent in 2023 to approximately 2.8 percent in 2024, with a further increase to 4.5 percent in 2025. Factors contributing to this positive outlook include declining interest rates, controlled inflation, stability in oil prices, and steady commodity prices.
For oil-exporting Arab nations, higher energy prices are expected to positively influence economic growth rates. Major oil-exporting countries are anticipated to grow by 3.7 percent in 2024 and 5.1 percent in 2025.
Specifically, the Kingdom of Saudi Arabia is projected to grow by 4.4 percent in 2024 and 5.7 percent in 2025. Qatar’s economy is expected to see growth rates of approximately 1.8 percent in 2024 and 3.1 percent in 2025. Kuwait is projected to witness a growth of 2.7 percent by the end of this year, increasing to 3 percent in the following year.
Meanwhile, the Sultanate of Oman is forecasted to achieve growth rates of 2.3 percent in 2024 and 2.7 percent in 2025. Bahrain’s economy is estimated to grow by 3.5 percent and 3.2 percent in 2024 and 2025, respectively.