UAE Economy Projected to Grow by 4.8% in 2025

Abu Dhabi, The Gulf Observer: The UAE economy is set to expand by 4.8% in 2025, according to Scott Livermore, Economic Advisor for the Institute of Chartered Accountants in England and Wales (ICAEW) and Chief Economist and Managing Director at Oxford Economics Middle East. In a statement to media, Livermore attributed this positive outlook to the strong performance of the non-oil sectors, particularly travel and tourism.

Livermore noted that the UAE’s non-oil economy is expected to grow by 4.6% in 2024, driven by significant growth in tourism, with visitor numbers to Dubai and traffic through Dubai International Airport (DXB) reaching record levels. “We expect visitor numbers to grow by over 20% this year and continue to see double-digit growth next year,” he added.

Despite challenges posed by higher interest rates, the UAE economy has remained resilient due to substantial government support and the ongoing implementation of growth and diversification strategies, including major initiatives like “We the UAE 2031” and Dubai’s D33 plan. Livermore emphasized that investment activity in the country is expected to remain robust as these plans unfold.

Livermore also highlighted the UAE’s increasing attractiveness to foreign investors and talent, citing reforms such as allowing 100% foreign ownership of onshore companies and reducing business setup costs. These measures have contributed to population growth and a strengthening real estate market.

The UAE’s focus on innovation and emerging sectors, including finance, creative industries, and manufacturing, was also emphasized as key drivers of economic growth.

Commenting on global economic trends, Livermore projected world economic growth at 2.7% for 2024 and 2025. He noted that concerns about a potential U.S. recession are unfounded, and recent developments suggest a more orderly and benign growth slowdown.

Livermore added that he expects the U.S. Federal Reserve to shift its focus from inflation to the labor market, with potential interest rate cuts of 50 basis points by the end of 2024 and up to 150 basis points by 2025, depending on labor market conditions.