The United Arab Emirates (UAE) is poised for continued robust economic growth, with the country’s gross domestic product (GDP) forecasted to increase by 4.2% this year, according to the latest report by the Arab Monetary Fund (AMF). Fueled by higher oil prices and a boost in business confidence, the UAE’s economy is expected to maintain its strong growth trajectory, averaging 4.6% from 2022 to 2024.
The AMF’s “Arab Economic Outlook Report” projects a growth rate of 4.2% for the UAE in 2023, accompanied by a decline in the consumer price index to 2.9% in 2023 and 2.57% in 2024. The report also highlights a projected 3.4% growth for Arab economies, supported by stable oil and gas prices and reduced prices for essential commodities such as agricultural products. To curb inflation, tighter monetary policies are anticipated.
The International Monetary Fund (IMF) has revised its growth outlook for the UAE, forecasting a faster expansion of 3.9% in 2023 compared to 3.5% this year. Similarly, the World Bank expects the UAE’s economy, the second-largest in the Gulf Cooperation Council (GCC), to grow at 3.3% in 2023, a slight reduction from the previous forecast of 4.1% in October. The non-oil sector in the UAE is set to experience robust growth of 4.8%, driven by strong domestic demand across key sectors such as tourism, real estate, construction, transportation, and manufacturing. Among the GCC countries, Oman is projected to have the highest growth rate in 2023, with an expected increase of 4.3%.
The AMF report emphasizes that Arab nations are actively enhancing their resilience, improving business environments, empowering the private sector, and investing in human capital through economic reform programs and strategies to diversify their economies. As a result, Arab countries’ economic growth rate is predicted to reach 4.0% in 2024, primarily due to the expected stability of oil and gas prices, essential goods prices, and controlled inflation. Major Arab oil exporters are anticipated to experience economic growth of 3.4% in 2023 and 4.2% in 2024, driven by higher energy prices. Meanwhile, Arab countries reliant on oil imports are expected to witness their growth rate rise from 3.1% in 2023 to 4.0% in 2024, following the containment of inflation by year-end and the implementation of eased monetary policies.
The report also highlights the positive outlook for the GCC countries in 2023, with an expected GDP growth of 3.4%. These nations’ efforts to diversify their income sources, coupled with stable and high oil prices, are likely to lead to increased oil revenues, improved financial outcomes, higher foreign exchange reserves, and stronger fiscal positions, according to the AMF.
In pursuit of growth, the report underscores the significance of promoting workforce localization and enhancing citizen participation in the private sector, particularly in the UAE, Saudi Arabia, and Bahrain.
