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World Bank cuts UAE growth outlook for 2024: The World Bank has revised downward its growth outlook for the UAE. It’s now forecasting GDP growth of 3.3% for the current calendar year, trimming 0.6 percentage points from its May projection of 3.9%, in its semi-annual MENA economic update — Growth in the Middle East and North Africa (pdf). Its 2025 forecast remains unchanged at 4.1%.
The UAE is still expected to lead MENA in real per-capita GDP growth, with the non-oil sector driving a 2.5% increase.
Current account surplus to narrow: The report’s authors expect the UAE’s current account surplus to drop to 7.5% of GDP in 2024, down from 9.2% in 2023. Fiscal surplus will hold steady at 4.9% of GDP this year, thanks to expanding non-oil revenues, putting the UAE in line with Qatar as the only countries in the region to maintain a fiscal surplus, thanks to the “expansion of non-oil revenues.”
Inflation on the rise: Inflation is expected to reach 2.2% in 2024, driven by rising housing and utility costs, before easing to 2.1% in 2025.
REMEMBER- UAE Inflation reached 2.08% in 1H 2024, narrowing slightly from the 2.09% it reached in 1H 2023.
Regional growth slashed as well: MENA economies are now expected to grow 2.2% this year, down from a summer forecast of 2.8%, but still higher than the 1.8% recorded in 2023. The region’s 2024 growth outlook has been significantly downgraded, particularly among conflict-affected countries.
The ray of sunshine: MENA growth is expected to accelerate to 3.8% in 2025, though that’s down from the World Bank’s earlier forecast of 4.2%.
The concern: “Economic uncertainty in MENA is currently twice the average of other emerging markets and developing economies worldwide,” according to the report, based on the range of forecasts from private sector analysts.
What’s next: The report was published just ahead of the World Bank and IMF Annual Meetings, which will take place next week in Washington, DC, from 21-26 October.
