CBUAE revises its 2024 growth outlook downwards for the second time: The Central Bank of the UAE (CBUAE) expects the economy to grow at a 3.9% clip in 2024, marking a downward revision of 0.3 percentage points from its April projection, it said in its 2023 annual report (pdf). Growth will “primarily [come] on the back of strong growth in the non-oil sector,” which it expects to grow 5.4%, the report said.

Inflation is expected to come in at 2.3% this year, down from the CBUAE’s previous projection of 2.5% inflation, according to the report.

The CBUAE upgraded its forecast for growth in 2025 to 6.2%, up 1 percentage point from its previous forecast, and supported by a significant increase in oil production following OPEC+’s June decision to grant the UAE a higher production quota in 2025.

Oil output is expected to grow at a marginal 0.3% this year, in line with the supply cut pledges, but is expected to accelerate by 8.4% next year as production levels increase, the CBUAE said.

The non-oil sector is poised to remain steady next year with 5.3% growth, on the back of successful reforms and a decline in interest rates expected to boost demand and trigger capital inflows, it said. But there are downside risks, including new supply disruptions due to geopolitical shocks, inflation, as well as a “deepening of property sector woes in China.”

The World Bank had similar 2024 projections: The World Bank also said in its latest forecast last month that the UAE is poised for a 3.9% growth rate in 2024, primarily driven by the oil sector, while the non-oil sector is also expected to demonstrate strong performance across sectors.

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