The International Monetary Fund expects the UAE’s economy to grow by 4% in 2024, with non-oil sectors remaining strong and oil production rising.
A team of International Monetary Fund experts, led by Ali Al-Eid, raised its growth forecast for the UAE economy to 4% in 2024, expecting average inflation to remain under control at a level close to 2%. This adjustment comes after the fund’s latest expectations indicated growth of 3.5%.
The expert group held discussions with the UAE government regarding the 2024 Article IV consultations from May 2 to 16.
Al-Eid pointed out that the expected fiscal and external surpluses remain high, supported by the relative rise in oil prices, with the general government surplus expected to reach about 5% of the gross domestic product in 2024.
Capital spending is expected to continue to meet infrastructure needs, and the introduction of a corporate income tax will support non-oil revenues.
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The International Monetary Fund expects the current account surplus to reach about 10% of GDP in 2024.
Economic growth in the UAE is witnessing broad-based momentum, driven by strong activity in the tourism, construction, manufacturing and financial services sectors.
Al-Eid pointed out that foreign demand for real estate, increasing bilateral and multilateral relations, and the UAE’s status as a safe haven have contributed to driving rapid growth in housing prices and increasing rents.
On the energy sector front, hydrocarbon GDP growth is expected to rise this year, including higher crude oil production from the UAE’s increased quota in OPEC+.
Although the impacts from geopolitical tensions have been contained so far, the outlook is subject to uncertainty and external risks, including those related to geopolitical tensions, global growth and financial conditions, and commodity price volatility.
The uncertain impacts of climate change and the pace of global decarbonization efforts are increasing the risks.
