Arab Monetary Fund Predicts Robust Growth for UAE and Gulf Economies

The UAE's economy is forecasted to grow by 3.9 per cent in 2024 and is expected to rise to 6.2 per cent in 2025, according to the Arab Monetary Fund (AMF).

The AMF's Arab Economic Outlook report, released today, attributes this year's growth to continued improvements in tourism, real estate, and international trade, alongside increased capital spending and sustained efforts to bolster the economy, including advancements in high-tech industries.

The report highlights the UAE's strong economic fundamentals, supported by a dynamic non-oil sector and robust public and monetary policies aimed at maintaining economic development, financial stability, and the soundness of the financial sector. The nation's strategic initiatives to enhance its status as a global trade and finance hub, ongoing infrastructure development, a strong regulatory framework attracting foreign investments, and a focus on innovation and technology-based sectors are key drivers of its growth.

In 2022, the UAE experienced significant economic growth of 7.5 percent, attributed to its effective response to the COVID-19 pandemic, supportive financial measures, and the implementation of a business-friendly environment. This growth was further bolstered by strong performance in the fuel sector and a substantial recovery in tourism. The UAE maintained positive growth, achieving a rate of about 3.6 per cent last year.

The AMF report projects that the growth rate of Arab economies will improve to 2.8 per cent in 2024 from 0.3 per cent in 2023. Economic growth is expected to accelerate to 4.5 per cent in 2025, driven by declining interest rates, controlled inflation, stable oil prices at relatively high levels, and stable commodity prices.

Oil-exporting Arab countries are expected to benefit from improved energy price levels, positively impacting their economic growth in 2024 and 2025. These countries are projected to see a growth rate of 3.7 per cent in 2024, rising to 5.1 per cent in 2025.

Specifically, the Kingdom of Saudi Arabia's economy is forecasted to grow by 4.4 per cent in 2024 and 5.7 per cent in 2025, while Qatar's economy is expected to grow by about 1.8 per cent in 2024 and 3.1 per cent in 2025. Kuwait's economy is projected to grow by 2.7 per cent by the end of this year, increasing to 3 per cent next year.

The Sultanate of Oman's economy is anticipated to achieve growth rates of 2.3 per cent and 2.7 per cent in 2024 and 2025, respectively. Bahrain's economy is estimated to grow by 3.5 per cent in 2024 and 3.2 per cent in 2025.

Overall, the AMF's report underscores the resilience and growth potential of the UAE and other Arab economies, driven by strategic initiatives, robust policy frameworks, and favourable global economic conditions.

News Source: Emirates News Agency