The International Monetary Fund (IMF) has estimated the UAE’s 2024 real gross domestic product (GDP) growth rate at 4%.
The growth UAE’s economic growth was described as “broad-based”, and driven by strong activity in the tourism, construction, manufacturing, and financial services sectors.
The projection is 0.5 percentage points higher than the 3.5% GDP growth the IMF had estimated in its April World Economic Outlook report. The organisation adjusted the predictions following the conclusion of a team of its experts’ visit to the UAE regarding the 2024 Article IV consultations.
“Foreign demand for real estate, increased bilateral and multilateral ties, and the UAE’s safe haven status continue to drive rapid growth in housing prices and an increase in rents, while adding to ample domestic liquidity,” the IMF said.
The IMF also anticipated that the UAE’s fiscal and external surpluses would remain high, supported by relatively high oil prices. The overall government surplus is expected to be around 5% of the UAE’s GDP in 2024, while the current account surplus is estimated to be about 10% of GDP for the same year.
The IMF noted that banks in the UAE generally possess substantial capital and liquidity reserves. Moreover, their general asset quality has improved and credit growth has remained resilient despite higher domestic interest rates.
“The central bank intends to restore the reserve requirements to the historical level of 14 percent for demand deposits,” the IMF said.
The UAE has been on a path towards the diversification of its economy away from oil. In this journey, the IMF highlighted the nation’s efforts to advance its CEPAs, attract FDI and talent, and implement the AI, digital economy and green strategies, described as key to growth.
The IMF’s forecast is slightly lower than that of the Central Bank of the UAE, which has estimated the country’s economy will grow 4.2% in 2024.