UAE economy to grow by 4% in 2024, says IMF

The International Monetary Fund (IMF) said the UAE’s gross domestic product (GDP) will expand by 4 per cent in 2024, higher than earlier estimates, as the Gulf state is experiencing robust growth.

“Economic growth in the UAE is broad-based, led by robust activity in the tourism, construction, manufacturing, and financial services sectors,” the IMF said in a statement.

The IMF said the strong foreign demand for real estate, increased bilateral and multilateral ties and the country’s safe haven status continue to drive rapid growth in housing prices and an increase in rents while adding to ample domestic liquidity.

Overall economic growth would likely be further supported by higher hydrocarbon GDP growth this year, in part driven by higher crude oil production from the UAE’s OPEC+ quota increase, while average inflation is expected to remain contained close to 2 per cent.

Similarly, fiscal and external surpluses are expected to remain strong on the back of relatively high oil prices. “The general government surplus is projected to be around 5 per cent of GDP in 2024 and public debt is on track to decline further towards 30 per cent of GDP,” the statement said.

The UAE’s current account surplus is projected at around 9 per cent of GDP in 2024.

The Washington-based fund had projected in April that the country’s economy would grow by 3.5 per cent this year, according to its latest Regional Economic Outlook report released in April.

The IMF cautioned that the outlook is subject to uncertainty and external risks, including geopolitical tensions, however, the UAE’s large public financial buffers help mitigate risks while accelerating public and private investment and structural reforms.

The UAE – one of the world’s top oil exporters – has accelerated plans to diversify its economy away from hydrocarbons and draw foreign investment, with non-oil GDP now representing over 70 per cent of the overall GDP contribution.

The country’s ambitious structural reform agenda to further advance Comprehensive Economic Partnership Agreements (CEPAs), attract foreign direct investment and talent, and fully implement the AI and digital economy strategies “could spur growth more than expected.”

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