{"id":100052,"date":"2025-01-27T00:00:00","date_gmt":"2025-01-27T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/uae\/imf-revises-uaes-gdp-growth-forecast-down-to-4\/"},"modified":"2025-01-27T00:00:00","modified_gmt":"2025-01-27T00:00:00","slug":"imf-revises-uaes-gdp-growth-forecast-down-to-4","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/uae\/2025\/01\/27\/imf-revises-uaes-gdp-growth-forecast-down-to-4\/","title":{"rendered":"IMF revises UAE\u2019s GDP growth forecast down to 4%"},"content":{"rendered":"

The International Monetary Fund has revised its forecasts for the UA<\/strong>E\u2019s <\/strong>economy this year to 4%<\/strong>, down from its December<\/a> forecast of 5.1% growth for the year, the IMF said in a press release<\/a> following its most recent visit to the UAE. <\/p>\n

The Fund also slashed its forecast for the hydr<\/strong>ocarbon sector,<\/strong> with the Fund now seeing the sector growing above 2% in 2025, down from its previous forecast in December of 6.7% growth for the sector this year.<\/span><\/p>\n

The revision comes on the back of Opec+\u2019s decision to sustain production cuts,<\/strong> as well as the UAE\u2019s implementation of a \u201ca more gradual Opec+ quota increase,\u201d the statement reads. \u201cVolatile oil prices\u201d are also set to impact revenues, the IMF said.<\/p>\n

This brings the IMF\u2019s forecast in line with that of the World Bank,<\/strong> which said<\/a> in a report last week that it sees the economy growing at a 4% clip in 2025 \u2014 slightly down from its previous forecast of 4.1% growth for the year. Meanwhile, the Central Bank of the UAE (CBUAE) penciled in<\/a> a higher growth estimate of 4.5% in 2025 in December.<\/p>\n

Non-hydrocarbon activity will help offset the losses:<\/strong> Non-hydrocarbon revenue \u2014 namely coming from tourism, construction, public expenditure, and continued growth in financial services \u2014 is expected to see steady growth in the coming years, the IMF mission concluded. The IMF previously predicted non-hydrocarbon GDP growth to come in at 4.5% this year, down from 5.3% in 2024.<\/p>\n

C<\/strong>apital inflows also remain strong on the back of \u201csocial and business-friendly reforms,\u201d<\/strong> driving demand for real estate \u2014 and, in turn, driving further growth in real estate prices, the report reads. <\/p>\n

Reforms are expected to bolster non-hydrocarbon revenue even further:<\/strong> The UAE\u2019s recent reform efforts will \u201csupport medium-term growth and a smooth energy transition, with prioritization and sequencing key to ensure effective outcomes. Ongoing infrastructure<\/p>\n

investments should enhance tourism and domestic activity, while ongoing trade liberalization,<\/p>\n

underpinned by Comprehensive Economic Partnership Agreements, should further boost trade<\/p>\n

and FDI,\u201d the IMF mission said.<\/p>\n

The Fund also slightly revised down its inflation forecast for the year,<\/strong> expecting it to remain contained at 2% \u2014 down from its December forecast of 2.1% inflation. This comes \u201cdespite higher housing and utilities-related costs.\u201d The current account surplus is projected at around 7.5% of GDP, down from its December forecast of 8.2%.<\/p>\n

NON-OIL ACTIVITY BOOSTS MIDDLE EAST GROWTH PROSPECTS-<\/p>\n

Investors are confident about the region\u2019s growth prospects this year:<\/strong> Growth in the Middle East is expected to be stronger in 2025 than it was in 2024 on the back of \u201ccontinued solid expansions in the non-oil economies in key countries such as Saudi Arabia and the United Arab Emirates,\u201d as well as \u201csome likely increase in oil production,\u201d according to the Association of Chartered Certified Accountants\u2019 Global Economic Conditions report (pdf)<\/a>. <\/p>\n

Confidence in the region among chief financial officers and accountants was among the highe<\/strong>st in the world in 4Q 2024<\/strong>, despite falling sharply from 3Q, coming only second to South Asia in terms of overall economic confidence among the 1.8k surveyed. The study also showed that new orders in the region grew by 10 index points in 4Q 2024, outperforming all other markets surveyed \u2014 further signaling confidence in the region\u2019s growth prospects for the year.<\/p>\n","protected":false},"excerpt":{"rendered":"

The Fund also cut the UAE\u2019s oil GDP forecast for 2025 to over 2%, down from 6.7% earlier<\/p>\n","protected":false},"author":1,"featured_media":100053,"comment_status":"","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"newspack_ads_suppress_ads":false,"newspack_popups_has_disabled_popups":false,"newspack_sponsor_sponsorship_scope":"","newspack_sponsor_native_byline_display":"inherit","newspack_sponsor_native_category_display":"inherit","newspack_sponsor_underwriter_style":"inherit","newspack_sponsor_underwriter_placement":"inherit","ep_exclude_from_search":false,"_primary_brand":0,"newspack_featured_image_position":"","newspack_post_subtitle":"","newspack_article_summary_title":"Overview:","newspack_article_summary":"","newspack_hide_updated_date":false,"newspack_show_updated_date":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[1556],"tags":[19,7,20,594,266,389],"brand":[],"newspack_spnsrs_tax":[],"class_list":["post-100052","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economy","tag-economy","tag-enterpriseam-uae","tag-gdp","tag-imf","tag-oil-and-gas","tag-opec-2","wpautop","entry"],"acf":{"mongo_id":"24f48f21-5d4d-4239-8a52-b17469802ca3","order":"3","is_powered_by":false,"story_type":"1","photo_url":"https:\/\/ent.news\/2024\/10\/1976.jpg","photo_position":"above","homepage_title":"","full_issue_title":"IMF revises UAE\u2019s GDP growth forecast down to 4%","related_issue":[100047],"teaser":"The Fund also cut the UAE\u2019s oil GDP forecast for 2025 to over 2%, down from 6.7% earlier","voice_url":"https:\/\/s3.us-east-1.amazonaws.com\/ent.news\/audio\/2025\/1\/.551e177d-4bbd-4dde-94aa-fb469fba8c80.mp3"},"yoast_head":"\nIMF revises UAE\u2019s GDP growth forecast down to 4% - 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