IMF Projects UAE Economy to Grow by 5.1% by 2025

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The real gross domestic product (GDP) of the United Arab Emirates is expected to expand by 5.1% in 2025, according to forecasts from the International Monetary Fund (IMF). The IMF’s World Economic Outlook report indicates that the UAE’s real GDP is projected to remain steady at 4% in 2024, with an anticipated rise to 5.1% in 2025.

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This forecast was released during the 2024 annual meetings of the IMF and World Bank Group, which also predicted that the economies of the Middle East and Central Asia region would grow by 2.4% in 2024 and 3.9% in 2025. Globally, growth is expected to remain stable but subdued, with a forecast of 3.2% growth for both 2024 and 2025, consistent with figures from the IMF’s previous World Economic Outlook reports in July and April 2024.

Inflation Forecasts 

Global inflation is expected to decline, from an annual average of 6.7% in 2023 to 5.8% in 2024 and 4.3% in 2025, with advanced economies projected to reach their inflation targets faster than emerging markets.

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Economic Growth in Major Economies 

The World Economic Outlook report forecasts that the U.S. economy will grow by 2.8% in 2024, before slowing to 2.2% in 2025. Meanwhile, the Eurozone economy is expected to grow by approximately 0.8% this year and 1.2% next year.

World Bank Update on the MENA Region’s Economy 

Earlier this month, the World Bank released its semi-annual update on the Middle East and North Africa (MENA) region’s economy, forecasting a 3.3% GDP growth for the UAE in 2024, rising to 4.1% in 2025.

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According to the report, the UAE’s current account surplus is expected to decrease to 7.5% in 2024, down from 9.2% of GDP in 2023, despite ongoing diversification efforts.

In 2025, the MENA region is expected to grow by 3.8%, with the Gulf Cooperation Council (GCC) countries forecast to grow by 4.2%, up from 1.9% in 2024.

The report also forecasts a modest increase in the region’s overall real GDP growth to 2.2% in 2024, up from 1.8% in 2023.

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Arab Monetary Fund Forecasts

Additionally, in July 2024, the Arab Monetary Fund projected that the UAE economy would grow by 3.9% in 2024, reaching 6.2% in 2025.

The report emphasized that the UAE economy is supported by strong fundamentals, driven by a dynamic non-oil sector and effective public and monetary policies aimed at fostering economic growth, financial stability, and financial system soundness.

The report also noted that the UAE saw significant economic growth of 7.5% in 2022, bolstered by a successful response to the Covid-19 pandemic, supportive financial measures, and a business-friendly environment developed in previous years.

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