UAE’s Economic Growth Projections by IMF for 2025.


The International Monetary Fund (IMF) has released an optimistic outlook for the United Arab Emirates (UAE), projecting a real GDP growth of approximately 4% in 2025. This positive trajectory is largely attributed to significant expansions in the non-hydrocarbon sectors, notably tourism, construction, public expenditure, and financial services. These industries have become pivotal in diversifying the UAE's economy, reducing its reliance on oil revenues, and fostering sustainable development. 

A key factor contributing to this growth is the substantial capital inflow resulting from the UAE's implementation of social and business-friendly reforms. These reforms have enhanced the nation's appeal to investors, leading to increased demand in the real estate market and a rise in property prices across various segments and locations. The thriving real estate sector not only reflects investor confidence but also signifies the effectiveness of the UAE's strategic initiatives to create a conducive business environment. 

In the hydrocarbon sector, despite OPEC+ agreements leading to lower-than-expected oil production, the IMF anticipates a growth exceeding 2% in 2025. This projection underscores the UAE's resilience and adaptability in managing its oil resources while adhering to international commitments. Moreover, inflation is expected to remain contained at around 2%, even amidst rising housing and utility costs, indicating effective monetary policies and economic stability. 

The fiscal outlook remains strong, with a projected fiscal surplus of approximately 4% of GDP in 2025, slightly down from an estimated 5% in the previous year. The current account surplus is expected to be around 7.5% of GDP, supported by international reserves covering over 8.5 months of imports. The UAE's banking sector also demonstrates stability, with adequate capitalization and liquidity, improved asset quality observed in 2024, and profitability bolstered by robust domestic activity and resilient credit demand. 


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