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The International Monetary Fund (IMF) has revised upward its 2024 growth forecast for the UAE to 4% in its latest end of mission statement, following its visit to the UAE earlier this month. The fund had previously penciled in 3.5% growth for 2024 in its World Economic Update report in April.
The IMF’s revised prediction comes on the back of increased domestic activity in tourism, construction, and financial services sectors, as well as foreign demand for real estate and improved bilateral ties “adding to ample domestic liquidity” by driving housing prices and rentals up.
The UAE’s diversification away from oil is also to thank, with accelerated public and private investments and reforms in areas such as renewable energy and technology expected to boost growth further, and buffer against geopolitical shocks, the IMF said. Still, an increased hydrocarbon GDP is expected to contribute to economic growth, driven by higher crude oil production from the UAE’s OPEC+ quota increase.
The IMF predicts inflation will trend close to 2.0% in 2024, representing a slight downward revision from the 2.1% annual inflation rate it had forecasted for 2024 back in April.
The fund expects the UAE’s current account surplus to come in at 9% this year — a few notches above the 7.8% that was projected in April due to high oil prices. The general government surplus is projected to land at 5% of GDP by the year’s end, while public debt is slated to decline to 30% with active debt management strategies.
