The non-oil sector is expected to grow by 4.6 percent year-on-year in 2024
The UAE is forecasted to experience an economic expansion of 4.8 percent in 2025. Scott Livermore, ICAEW economic advisor and chief economist and managing director of Oxford Economics Middle East, made this projection in a statement to the Emirates News Agency (WAM).
Non-oil sector expansion
Livermore highlighted that the non-oil sector is expected to grow by 4.6 percent year-on-year in 2024. He noted that industries outside oil, particularly travel and tourism, will continue to thrive, with visitor numbers to Dubai and traffic through DXB reaching unprecedented levels. He indicated that visitor numbers are likely to rise significantly, increasing by over 20 percent this year and achieving double-digit growth again next year.
Furthermore, he acknowledged that while the UAE has faced challenges, such as notably higher interest rates, the economy has managed to navigate these difficulties thanks to substantial government support as growth and diversification initiatives are put into action.
Strong investment activity, focus on innovation
Additionally, Livermore mentioned that investment activity in the UAE is anticipated to remain strong as initiatives like ‘We the UAE 2031,’ D33 in Dubai, and other strategies are executed.
He also pointed out that the UAE is enhancing its appeal to foreign investors and talent through measures such as permitting 100 percent foreign ownership of onshore companies and reducing business establishment costs, which have contributed to population growth and strengthened the real estate market.
Moreover, he noted that policymakers are concentrating on innovative and emerging sectors, including finance, creative industries, and manufacturing.
Global economic projections
Regarding the US Federal Reserve’s interest rates, Livermore expressed expectations that the Fed would cut interest rates in September, shifting its focus from inflation to the labor market while acknowledging the associated risks.
In addition, He projected a reduction of 50 basis points by the end of 2024 and 150 basis points by the end of 2025, although he suggested that the cuts could occur sooner if the labor market deteriorates more significantly than currently anticipated.
Reassessing recession concerns
Livermore also anticipated that the global economy would grow by 2.7 percent this year and next, arguing that concerns about the US potentially heading into a recession are exaggerated and that recent developments align with a more orderly and manageable growth slowdown.
SOURCE & CREDITS: economymiddleeast.com