The IMF’s Article IV Consultations mission expects the UAE to maintain strong economic growth of around 4% in 2025, led by non-oil activity boosted by tourism, construction and government spending sectors, as well as continued growth in financial services.
The mission indicated in a statement issued today at the conclusion of its visit to the UAE that the strong capital flows resulting from attractive social and economic reforms contribute to increasing demand for real estate and increasing their prices in various regions. As for the oil sector, it is expected to record growth of more than 2% during the year. , driven by gradual increases in OPEC quotas.
The mission expected that the fiscal surplus would reach about 4% of the GDP in 2025, while non-oil revenues are expected to witness gradual growth with the continued implementation of the corporate tax, and public debt will remain stable at about 30% of the GDP, while it is expected that The current account surplus is about 7.5% of GDP, with strong international reserves sufficient to cover more than 8.5 months of imports.
According to the International Monetary Fund, UAE banks maintained sufficient capital and liquidity, with asset quality improving during 2024.
Strong economic activity and continued demand for credit have contributed to enhancing banks’ profitability, despite continued high interest rates.
The mission pointed out that the percentage of banks’ exposure to the real estate sector decreased by 4 percentage points to 19.6% in September 2024 compared to December 2021.
The Fund’s mission confirmed that ongoing economic reforms promote a smooth transition in the energy sector and support sustainable growth. Investments in infrastructure also contribute to strengthening the tourism sector and local activity, while comprehensive economic partnership agreements work to support trade and foreign direct investment.
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