IMF Predicts 4 Percent Economic Growth for UAE in 2025

In a statement issued following a staff visit to the UAE, the IMF highlighted the country's economic resilience and outlined the key factors driving its economic performance.

"Near-term growth is strong and expected to remain healthy at around 4 percent in 2025, despite lower-than-expected oil production related to OPEC+ agreements," the statement noted.

Non-hydrocarbon sectors, including tourism, construction, public expenditure, and financial services, are expected to drive the growth, alongside strong capital inflows and increased real estate demand fueled by social and business-friendly reforms, added the report.

The IMF forecasted hydrocarbon GDP to grow by more than 2.0 percent in 2025. Inflation is anticipated to remain contained at approximately 2.0 percent, despite rising costs in housing and utilities.

The fiscal surplus is expected to moderate to about 4 percent of GDP in 2025, down from an estimated 5 percent in 2024, while non-hydrocarbon revenues are poised to grow with the implementation of corporate income tax. Public debt is forecasted to remain around 30 percent of GDP, with the current account surplus projected at 7.5 percent of GDP and international reserves covering over 8.5 months of imports.

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