UAE’s Economic Growth Projected to Reach 4.8% by 2025: Oxford Economics
The United Arab Emirates (UAE) is set for an economic acceleration, with growth projected to reach 4.8% by 2025, as per Scott Livermore, Chief Economist and Managing Director of Oxford Economics Middle East. A significant expansion of the country’s non-oil economy, expected to grow by 4.6% year-on-year in 2024, is one of the primary drivers of this growth.
Livermore highlighted the robust performance of non-oil sectors, especially travel and tourism, which are experiencing record-breaking visitor numbers and air traffic through Dubai’s DXB. He anticipates visitor growth to maintain its momentum, with an over 20% increase this year and continued double-digit growth next year.
Despite challenges such as markedly higher interest rates, Livermore noted that the UAE’s economy remains resilient, buoyed by substantial government support and strategic growth initiatives. Key investment activities, particularly those linked to the “We the UAE 2031” vision, Dubai’s D33 strategy, and other development plans, are expected to remain strong.
Additionally, the UAE’s attractiveness to foreign investors is on the rise, thanks to initiatives like allowing 100% foreign ownership of onshore companies and reducing business setup costs. These measures have fueled population growth and strengthened the real estate market. Policymakers are also focusing on innovative and emerging sectors, ranging from finance to creative industries and manufacturing.
Regarding the US Federal Reserve’s interest rate policies, Livermore predicts a shift, with a possible 50 basis points (bps) reduction by the end of 2024 and an additional 150 bps cut by 2025, contingent on labor market conditions. He reassured that concerns about a US recession are likely overblown, anticipating a moderate and manageable slowdown in global economic growth.
Livermore expects the global economy to expand by 2.7% both this year and the next, aligning well with the UAE’s positive outlook and proactive economic strategies.