UAE economy growth is set to accelerate faster than previously expected, reaching 4.8% by 2025, according to Oxford Economics. The firm's Chief Economist and Managing Director for the Middle East, Scott Livermore, told the Emirates News Agency (WAM) that strong non-oil sector performance is the primary engine behind the upgraded forecast.
Non-Oil Sector Leads the Charge
The UAE's non-oil economy is projected to grow by 4.6% year-on-year in 2024, with travel and tourism serving as the standout performer. Livermore highlighted Dubai International Airport's record-breaking visitor numbers and passenger traffic as central to the growth story, with the sector expected to expand by more than 20% in 2024 and sustain double-digit growth in subsequent years.
Government Initiatives Underpin Confidence
Despite a global environment of persistently elevated interest rates — a headwind Livermore acknowledged — the UAE has managed to attract sustained foreign investment through proactive policy decisions. He specifically credited large-scale government initiatives, including the 'We the UAE 2031' vision and Dubai's D33 economic plan, for boosting investor confidence and accelerating economic diversification.
Investor-Friendly Reforms Drive Population and Real Estate Growth
Key structural reforms have significantly enhanced the UAE's competitiveness as an investment destination. Policies permitting 100% foreign ownership of onshore companies and a reduction in business establishment costs have drawn a growing pool of international investors and entrepreneurs. These measures have also contributed to population growth, which in turn has strengthened the real estate market and reinforced the UAE's status as a preferred hub for business and capital.
Global Outlook and Easing Pressures
Looking at the broader picture, Livermore forecasts global economic growth to settle at 2.7% in both 2024 and 2025. He anticipates some easing of geopolitical tensions alongside a shift in US Federal Reserve monetary policy, with interest rate cuts expected before the end of 2024 — a development that should relieve pressure on the global economy and provide further tailwinds for UAE growth.
