CBUAE Maintains 4% GDP Growth Forecast For 2024, Sees 4.5% In 2025

The Central Bank of the UAE (CBUAE) has kept its 2024 GDP growth forecast at 4.0%, with expectations to increase to 4.5% in 2025 and 5.5% in 2026.

In its December 2024 Quarterly Economic Review, the CBUAE noted that growth this year is driven by sectors like tourism, transportation, finance, construction, real estate and communications. Non-oil GDP grew by 4.8% in Q2 2024, up from 4.0% in the previous quarter, thanks to strong performance in manufacturing, trade, transportation and real estate.

Furthermore, non-oil GDP growth is expected to stay strong at 4.9% in 2024 and 5.0% in 2025, driven by government efforts to attract foreign investments and promote economic diversification, WAM reported.

Oil production averaged 2.9 million barrels per day in the first 10 months of 2024, with growth expected to be 1.3% in 2024 and 2.9% in 2025.

The UAE's fiscal performance in H1 2024 was strong, with government revenue and fiscal surplus showing notable improvements. The fiscal surplus reached AED65.7 billion, or 6.7% of GDP, a 38.8% increase from AED47.4 billion in H1 2023.

In Q3 2024, 16 non-oil sectors, including wholesale and retail trade, manufacturing, and construction, showed steady growth. The manufacturing sector attracted more foreign direct investment (FDI), and the construction sector saw strong growth in the first nine months of 2024.

The UAE's economic partnerships, including comprehensive economic partnership agreements (CEPA), strengthened trade relations, with non-oil trade exceeding AED 1.3 trillion in H1 2024, up 10.6% YoY.

This reflected successful efforts to diversify the economy and strengthen trade ties.

Government revenue in H1 2024 grew by 6.9% YoY to AED263.9 billion, driven by a 22.4% rise in tax revenues. Capital expenditure also rose by 51.7% YoY to AED11 billion, highlighting a focus on large-scale infrastructure projects.

Economic activity in the UAE's non-oil private sector continued to expand, showing strong business confidence. In October, the UAE's Purchasing Managers' Index (PMI) reached 54.1, showing optimism among local companies, with expectations of continued demand and sales supporting growth.

Future investments and initiatives are expected to reinforce this positive outlook. In Dubai, the PMI was 53.2 in October, closely matching the national index, indicating ongoing growth in the emirate's non-oil private sector.

The number of employees under the CBUAE Wages Protection System (WPS) grew by 4% YoY in September while average salaries rose by 7.2% YoY, reflecting strong domestic consumption and sustainable GDP growth.