January 24, 2025
2 mins read

UAE’s near-term growth strong, says IMF 

The Fund highlighted that the UAE banks’ exposure to the real estate sector has declined by 4 percentage points to 19.6 during the period December 2021 to September 2024…reports Asian Lite News

The International Monetary Fund expected UAE’s near-term growth to remain healthy at around 4 percent in 2025, despite lower-than-expected oil production related to OPEC+ agreements. 

This came in a statement issued by the IMF at the conclusion of a staff visit to the UAE to discuss economic and financial developments, the outlook and the country’s policy and reform priorities. 

“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. Non-hydrocarbon activity is boosted by tourism, construction, public expenditure, and continued growth in financial services. Capital inflows remain strong, attracted by social and business-friendly reforms, and contribute to ongoing demand for real estate, which is driving further growth in house prices across different segments and locations. Hydrocarbon GDP is expected to grow above 2.0 percent this year, following OPEC+ decisions to sustain production cuts, and as the UAE implements a more gradual OPEC+ quota increase. Inflation is expected to remain contained around 2.0 percent in 2025 despite higher housing and utilities-related costs,” reads the statement. 

The statement expected hydrocarbon revenue to decline amid volatile oil prices and reduced oil production, “but fiscal and external surpluses are projected to remain comfortable. The fiscal surplus is expected to moderate to around 4 percent of GDP in 2025 from an estimated 5 percent of GDP last year. However, non-hydrocarbon revenue is projected to increase steadily in the coming years with the ongoing implementation of the corporate income tax. Public debt remains contained at around 30 percent of GDP. The current account surplus is projected at around 7.5 percent of GDP, while international reserves are healthy at over 8.5 months of imports.” 

It expected the UAE banks to remain adequately capitalised and liquid overall, “while asset quality further improved in 2024. Robust domestic activity and resilient demand for credit has supported banks’ profitability amid still-elevated interest rates.” 

The Fund highlighted that the UAE banks’ exposure to the real estate sector has declined by 4 percentage points to 19.6 during the period December 2021 to September 2024, and risks associated with continued increasing house prices should continue to be closely monitored. 

The IMF hailed the UAE reform efforts as supportive of medium-term growth and a smooth energy transition, with prioritisation and sequencing key to ensure effective outcomes. “Ongoing infrastructure investments should enhance tourism and domestic activity, while ongoing trade liberalisation, underpinned by Comprehensive Economic Partnership Agreements, should further boost trade and FDI. Advancing a medium-term fiscal framework would ensure a coordinated national fiscal stance, promote long-term sustainability, and help meet climate change-related challenges. Continued progress in improving economic data collection and dissemination will reinforce these efforts.” 

ALSO READ: UAE experts stress urgency of cyber defences 

Previous Story

e& Named Fastest Growing Brand Globally 

Next Story

Sharjah Literature Festival concludes inaugural edition V

Latest from -Top News

Trump due in Saudi, UAE amid new tariffs

The GCC bloc, which includes the UAE, Saudi Arabia, Oman, Kuwait, Qatar, and Bahrain, has been hit with a 10% tariff, placing them among the lower-tiered rates US President Donald Trump has

China Says US Tariff Hikes Violate WTO Rules

China is among the hardest-hit, facing a 34 per cent levy—part of what Washington describes as reciprocal measures aimed at rebalancing trade deficits and curbing unfair trade practices China has strongly condemned

Modi Due in Sri Lanka to Cement Ties

Indian High Commissioner to Sri Lanka Santosh Jha described the visit to island nation as “very important” and likely will set a fresh agenda for bilateral cooperation Prime Minister Narendra Modi’s visit

India Acts as ‘First Responder’ in Myanmar: Jaishankar

Jaishankar took the opportunity to underscore India’s swift humanitarian response, highlighting Operation Brahma, which was launched to assist those affected by the earthquake. External Affairs Minister S. Jaishankar on Thursday expressed India’s
Go toTop

Don't Miss

Dubai Culture showcases Emirate’s artistic landmarks at ATM 2022

Dubai Culture and Arts Authority is participating in Arabian Travel

Stop Fighting, Focus on Climate Justice, Children’s Plea to COP28

Now roughly the 196 parties to the UN climate agreement