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The Central Bank of the UAE (CBUAE) maintained its growth outlook for 2024 at 4% on the back of strong performance in the tourism, transportation, financial and ins. services, and construction and real estate sectors, according to its Quarterly Economic Review (pdf), unchanged from its expectations in September. Current levels of oil production are expected to “partially moderate” overall growth for the year.
The central bank dialed back its forecast for growth in 2025 to 4.5%, compared to its 6% projection in September, on the back of Opec+’s decision to extend production cuts into 1Q 2025. It also projected growth to accelerate to 5.5% in 2026 due to the base effects of hydrocarbon GDP.
The central bank also revised downwards its forecast for non-oil sector growth to 4.9% this year, down from its earlier 5.2% projection, and next year’s forecast to 5%, compared to its previous 5.3% forecast. It expects “robust but slightly lower” sector growth from 2026 to 2028, amounting to 4.8% in 2026, 4.6% in 2027, and 4.5% in 2028.
The oil sector is predicted to grow by 1.3% in 2024, up from the previous 0.7% projection, with a 3.2% increase in gas and non-oil fuels and a 0.6% decline in oil output. It also downgraded its forecast for 2025 to 2.9%, compared to its previous 7.7% projection — though it sees the sector rebounding to 7.6% growth the following year, 5.5% growth in 2027, and 4.2% growth in 2028.
The CBUAE lowered its inflation forecast for 2024 to 1.8%, down from its previous projections of 2.2% in September. It expects inflation to come in at 2% next year, driven by non-tradeable components of the consumer basket, while partially offset by moderating energy prices.
How the CBUAE’s expectations compare: The World Bank expects the UAE’s growth to come in at 3.3% in 2024, and 4.1% in 2025 and 2026.
