CBUAE Projects 6.2% GDP Expansion by 2025

The Central Bank of the United Arab Emirates (CBUAE) expected the country's strong foreign trade performance to continue in 2024 and 2025, sustaining its projected growth for the UAE’s real GDP in 2024 at 3.9 percent, with expectations for it to further accelerate to 6.2 percent in 2025.

The UAE's economic outlook for 2024-2025 from its June 2024 Economic Quarterly Review indicates strong non-hydrocarbon GDP growth at 5.4% in 2024 and 5.3% in 2025. The hydrocarbon sector is expected to grow by 0.3% in 2024 and 8.4% in 2025, contributing to an overall economic expansion, bolstered by increased non-hydrocarbon activity and improved hydrocarbon sector performance.

In 2023, the UAE's fiscal balance was positive at AED85.6 billion (4.5% of GDP), despite a 13.9% decline in revenue to AED526.1 billion (27.9% of GDP). Government expenditure rose 3.1% to AED440.5 billion (23.3% of GDP). The introduction of corporate income tax is expected to strengthen fiscal sustainability. Economic indicators, including a PMI of 55.3 in April 2024, reflect robust non-oil sector activity driven by optimism and anticipated growth in demand, sales, and investments.

Dubai recorded a PMI of 55.1 in April 2024, reflecting persistent growth in the emirate's non-oil private sector.

According to the figures, the number of employees covered by the CBUAE Wage Protection System (WPS) and average employee salary increased by 7.5 percent and 9.4 percent YoY in April 2024, respectively. These positive readings for employment and wage growth point to robust domestic consumption and sustainable GDP growth going forward.

In early 2024, Abu Dhabi's real estate sales rose, particularly in ready units, while Dubai maintained high tourism traffic with stable hotel occupancy at 83% and a slight increase in total room nights occupied.

Furthermore, Dubai recorded an 11 percent rise in tourist arrivals in the first three months of 2024 compared to the same period last year, taking advantage of the revival of worldwide travel demand. During this period, the emirate welcomed 5.2 million international overnight visitors, an increase from 4.7 million tourists in the first quarter of the previous year.

Zayed International Airport welcomed over 6.8 million passengers in the first quarter of 2024, taking advantage of the top-tier facilities and services at its newly opened terminal in Abu Dhabi. This emphasises Abu Dhabi’s status as a major transportation hub, with a 36 percent increase in passenger numbers compared to the first quarter of 2023.

In early 2024, Dubai International Airport had its busiest quarter yet, with 23 million passengers, an 8.4% increase from the previous year. This underscores its role as a global aviation hub and its contribution to Dubai's economy. Additionally, Dubai approved a AED128 billion project to expand Al Maktoum International Airport, aiming to become the world's largest by size and capacity.

News Source: Emirates News Agency