UAE's Central Bank Upgrades GDP Growth Forecasts for 2024 and 2025 Amid Strong Sector Performance

UAE, 26 September, 2024 : The Central Bank of the UAE (CBUAE) has raised its GDP growth forecast for 2024 to 4%, up from 3.9%, citing improved performance in the oil sector. For 2025, GDP growth is projected to reach 6%, driven by strong non-hydrocarbon sector growth and a significant recovery in hydrocarbon production.

According to the CBUAE's Quarterly Economic Review, non-oil GDP is expected to grow by 5.2% in 2024 and 5.3% in 2025. This is attributed to government efforts to attract foreign investment and structural reforms, including 100% foreign ownership and tax changes. The hydrocarbon sector is forecasted to grow by 0.7% in 2024, followed by a 7.7% expansion in 2025.

In Q1 2024, the UAE's fiscal balance remained positive at AED 23.5 billion, representing 4.9% of GDP. Tax revenue increased by 32.5% year-on-year, driven by the introduction of corporate tax. Government spending reached AED 97.1 billion, marking a 5% increase, with significant growth in capital expenditure.

The CBUAE noted that employment and wage growth remain robust, signaling strong domestic consumption. Key non-oil sectors such as trade, manufacturing, and construction continue to expand, supported by trade agreements, foreign direct investment, and infrastructure projects like Etihad Rail and Dubai Creek Harbor.

Source : www.wam.ae