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Economic growth will accelerate in 2024 to 3.8%, up from last year’s 3.0%, according to a Reuters poll of 20 economists. The economists also expect the UAE’s budget surplus to narrow this year, although an exact figure was not provided.
How this compares to other projections: The World Bank expects to see 3.7% growth in 2024, it said in its Global Economic Prospects report, up from the previous estimate of 3.4% in the June edition of its report. The Arab Monetary Fund sees the UAE’s GDP growing at a 4.3% clip this year, while the Central Bank of the UAE is more bullish, saying last month it sees the economy growing at a 5.7% clip in 2024. S&P Global Ratings also expects the economy to grow more than 5% this year.
THE REGIONAL PICTURE-
The outlook: All six economies of the Gulf Cooperation Council (GCC) are expected to grow at an average of 3.5% in 2024, with estimates of 2023 to have closed at 0.8%, the survey showed. “For 2024, we anticipate [oil] production cuts to remain in place, which dampens the oil sector outlook and also total real GDP,” said S&P Global’s Ralf Wiegert.
Diversification is set to fuel growth in the regional bloc’s non-oil sector with expectations of the sector growing 3.6% this year “underpinned by continued investment as oil exporting countries push ahead with ambitious economic diversification programmes,” said chief economist and head of research at Emirates NBD, Khatija Haque.
The downside risk: Pundits pointed to a “challenging global outlook” as potentially weighing on GCC economies’ performance this year, thanks to a combination of high interest rates, regional tensions from the war between Israel and Hamas to the trade disruption in the Red Sea, and “an unlikely reversal in oil production cuts.”
