UAE Continues to Lead as GCC's Fastest Growing Economy in 2024 and 2025

The United Arab Emirates (UAE) is set to maintain its status as the Gulf Cooperation Council's (GCC) fastest-growing economy, bolstered by projections of robust oil output and supportive fiscal policies, economists announced today.

James Swanston, Mena region economist at Capital Economics, forecasted that the UAE's GDP would expand by 3.3% this year and accelerate to 5.5% in 2025, outpacing regional peers. This optimistic outlook hinges on the UAE's ability to ramp up oil production ahead of other OPEC+ nations, thanks to its solid financial footing and resilient balance sheet.

Following recent deliberations within OPEC+, the UAE secured approval to increase its oil production quota by 300,000 barrels per day starting next year. This decision marks a strategic shift for the UAE, which will commence unwinding its voluntary output cuts from October, anticipating a 6% boost in oil output by 2025 compared to previous estimates.

Ole Hansen, head of commodities strategy at Saxo Bank, highlighted contrasting views on future oil demand between OPEC and the International Energy Agency (IEA). While OPEC projects a substantial increase in demand this year, the IEA remains conservative, expecting modest growth due to global economic uncertainties and advancements in electric vehicles.

Looking ahead, economists anticipate a gradual economic recovery across the Gulf region, primarily driven by increased oil production starting October. Non-oil sectors are also expected to contribute positively to economic growth, supported by potential monetary easing and easing inflation pressures.

News Source: Khaleej Times