The IMF has revised downward its 2024 growth forecast for the UAE to 3.5% in its latest World Economic Update report (pdf). The Fund had penciled in 4.0% growth for 2024 in the October edition of the report (pdf). The Fund also estimates the UAE’s economy to grow at a 4.2% clip in 2025.

The Fund’s projections are slightly lower than others: The World Bank and Economy Ministry both estimated the UAE’s growth to reach 3.9% in 2024. Oxford Economics, meanwhile, projects the economy will grow at 4.4%.

INFLATION-

The IMF predicts a 2.1% rise in consumer prices in 2024 from 1.6% in 2023. This is a slight downward revision from the 2.3% annual inflation rate the Fund had forecasted for 2024 back in October. The report also sees inflation decelerating slightly to 2.0% in 2025.

How this compares: The Economy Ministry expects inflation to decelerate in 2024 to 2%, down from 3.4% in 2023. The Central Bank of the UAE recently revised upward its 2024 inflation projection to 2.5%, up from the previously projected 2.1%.

FISCAL PERFORMANCE-

The Fund expects the UAE’s current account balance-to-GDP ratio to come in at 7.8% this year — just a notch above the 7.7% that was projected in October. This figure will fall further to 6.9% in 2025, according to the report.

THE REGIONAL OUTLOOK-

Growth in the MENA region is expected to pick up pace, with projections rising from 2.0% in 2023 to 2.8% in 2024 and 4.2% in 2025, according to the Fund. However, a slight downward revision of 0.1 percentage point for 2024 reflects lower non-oil activity and oil revenues, particularly in Iran.

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