logo
UAE economy expected to expand at 4.8% this year on trade, tourism

UAE economy expected to expand at 4.8% this year on trade, tourism

Khaleej Times18-03-2025

The UAE economy is expected to grow at 4.8 per cent this year, a report showed on Tuesday.
According to the latest ICAEW Economic Insight report prepared by Oxford Economics, trade and tourism are likely to be the key drivers of the UAE's growth story. 'We remain confident the tourism industry – the fastest-growing sector across the region in 2024 – will remain a vital engine for growth and diversification efforts. Trade will also continue to be a key growth driver, especially in the UAE, which has recently broadened market access and fostered collaboration through several more comprehensive economic partnership agreements. The UAE's foreign trade reached a milestone in 2024, surpassing Dh3 trillion for the first time,' the report said.
Increased oil production quotas from the Organisation of Petroleum Exporting Countries and its allies, colelctively known as Opec+, are also expected to boost the economy. 'The UAE will benefit from a higher production quota of 3.5 million bpd, supporting oil sector growth of 4.8 per cent. We think growth in the GCC oil sectors will pick up more strongly in 2026 as countries continue to raise supply,' the report said.
According to S&P Global Ratings, the oil sector will support the UAE's growth in 2025 and 2026. Total growth (oil and non-oil) is expected at 5.0 per cent in 2025 and 4.9 per cent in 2026, the ratings agency said on Tuesday.
Average consumer price inflation is likely remain to stable at 1.9 per cent in 2025. 'Pausing monetary policy is balancing strong domestic demand. Momentum will likely be retained in 2025 as demand for services — tourism, trade and finance — remains strong,' S&P analysts wrote.
Despite the uncertain global outlook, the report forecasts GCC economies to grow by 4 per cent, up from an estimated 1.8 per cent in 2024. The economy of the wider Middle East is expected to grow at 3.3 per cent in 2025.
While US President Donald Trump's tariff policies have created uncertainty over external demand, the GCC remains largely sheltered from direct tariff impacts, the report noted. 'The region's non-energy sectors are projected to grow by 4.4 per cent this year, up from an estimated 3.9 per cent in 2024, with regional PMI data firmly in expansionary territory,' the report said.
Saudi Arabia's, oil output is expected to reach 9.3 million barrels per day, driving oil sector growth of 1.9 per cent, while its GDP is expected to expand by 5.8 per cent.
Oil prices have fallen sharply in recent weeks due to tariff threats and increased Opec+ supply, with prices forecast to average $70.5 per barrel this year, down from $80.5 in 2024.
Saudi Arabia and the UAE are expected to lead non-oil sector growth with 5.8 per cent and 4.8 per cent respectively. Tourism – the fastest-growing sector across the region in 2024 – will remain a vital engine for growth, with Saudi Arabia expecting continued expansion supported by the GCC-wide visa.
Hanadi Khalife, head of Middle East, ICAEW, said: 'The business landscape across the GCC continues to demonstrate resilience and adaptability in the face of global economic uncertainty. We're seeing strong investment in key sectors like tourism and infrastructure, which are creating new opportunities for growth.'
Scott Livermore, ICAEW economic adviser and chief economist and managing director, Oxford Economics Middle East, said: 'The GCC's projected 4 per cent growth in 2025 highlights the region's ability to withstand external pressures while advancing its diversification efforts. Despite softer oil prices, the gradual easing of OPEC+ production cuts will support energy sector growth after two years of contraction.'
Qatar's GDP is forecast to expand by 2.1 per cent this year, with growth expected to more than double in 2026 as additional LNG capacity comes online. The non-energy economy is projected to grow by 2.9 per cent this year, remaining the primary growth engine.
Tourism has provided significant support to Qatar's non-energy growth, with overnight arrivals reaching 5 million by end-2024, a 23 per cent increase on 2023. The launch of the pan-GCC visa, is expected to push visitor numbers to 5.3 million in 2025.
The fiscal surplus is forecast at 27.3 billion Qatari riyals (3.3 per cent of GDP) in 2025, significantly better than the deficit of 13.2 billion riyals pencilled into this year's budget.
Bahrain's economy is set to double its growth rate to 2.8 per cent this year, with the non-oil economy expanding by 3.1 per cent. The oil sector, after contracting by an estimated 2.4 per cent in 2024, is expected to see a modest 0.9 per cent recovery.
As part of its diversification efforts, Bahrain is establishing new industrial free zones and developing tourism infrastructure, including a $427 million waterfront project. However, persistent budget deficits and a rising debt burden above 100 per cent of GDP pose downside risks to growth.

Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

Wall Street heads for cautious start, dollar eases ahead of US-China talks
Wall Street heads for cautious start, dollar eases ahead of US-China talks

Zawya

time2 hours ago

  • Zawya

Wall Street heads for cautious start, dollar eases ahead of US-China talks

Wall Street index futures hovered a touch higher while the dollar pared recent gains at the outset of London talks meant to mend a trade rift between the United States and China. S&P 500 E-minis were up around 8 points, or 0.1%, while Nasdaq 100 E-minis ticked 14 points higher, to almost 0.1%. MSCI's broadest index of world shares climbed 0.2%, and earlier hit a record high of 894.13. Europe's STOXX 600 ticked 0.2% lower, weighed by aerospace and defence-linked sectors. Top trade representatives from Washington and Beijing are due to meet for talks expected to focus on critical minerals, whose production is dominated by China. "Trade policy will remain the big macro uncertainty," said Kyle Rodda, a senior financial market analyst at "Signs of further momentum in talks could give the markets fresh boost to kick off the week." U.S. Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick and Trade Representative Jamieson Greer will represent Washington in talks with China, U.S. President Donald Trump said in a social media post. China's foreign ministry said Vice Premier He Lifeng will be in Britain for the first meeting of the China-U.S. economic and trade consultation mechanism. Wall Street stocks closed sharply higher on Friday after the closely watched monthly U.S. jobs data eased concerns about damage to the world's biggest economy from Trump's unpredictable tariff regime. Sentiment was weighed down by a standoff in Los Angeles that led to Trump calling in the California National Guard to quell demonstrations over his immigration policies. The dollar fell 0.4% against the yen to 144.315, trimming its 0.9% jump on Friday. The European single currency rose about 0.2% to $1.1415. Sterling rose against the dollar 0.4% to $1.3595. CHINA EXPORT GROWTH SLOWS U.S. job growth slowed in May by less than forecast, data showed on Friday. But dour economic readings from China added to evidence the trade war is taking a toll. China's export growth slowed to a three-month low in May, while factory-gate deflation deepened to its worst level in two years, separate reports showed on Monday. Tariff negotiation hopes dispelled dour economic data and Asian markets closed higher. The Japanese Nikkei closed almost 1% higher, China's blue-chip CSI300 Index climbed roughly 0.3%, while the Shanghai Composite Index gained 0.4%. Japan is considering buying back some super-long government bonds issued in the past at low interest rates, two sources with direct knowledge of the plan said on Monday. Attention now turns to U.S. inflation data on Wednesday that may adjust expectations for the timing of any rate cuts by the Federal Reserve. The Fed is in a blackout period ahead of its June 18 policy decision. "Beneath the surface, fragilities are building," said Bruno Schneller, managing director at Erlen Capital Management, noting that the U.S. CPI release is expected to show another rise, signaling that inflation remains sticky. "While this may offer some near-term support for the U.S. dollar, broader macro dynamics – notably fiscal expansion, rising structural deficits, and political unpredictability – are increasingly clouding the outlook for both rates and currencies," he said. Gold rose around 0.25% to $3,318 per ounce after a 1.3% fall on Friday. Brent crude recovered earlier losses to climb 20 cents to $66.67 while U.S. WTI crude rose 19 cents to $64.67 a barrel following a 1.9% surge late last week. (Reporting by Nell Mackenzie in London and Rocky Swift in Tokyo; Editing by Dhara Ranasinghe and Bernadette Baum)

Saudi Arabia's first-quarter GDP grows by 3.4%, beating flash estimates
Saudi Arabia's first-quarter GDP grows by 3.4%, beating flash estimates

Zawya

time2 hours ago

  • Zawya

Saudi Arabia's first-quarter GDP grows by 3.4%, beating flash estimates

Saudi Arabia's economy grew by more than expected in the first quarter of 2025, according to government data estimates, with lower oil prices impacting the economy less than previously forecast. First-quarter GDP grew by 3.4% compared to the same quarter of the previous year, beating flash estimates of 2.7% released in May by the Saudi General Authority for Statistics. "The upward revision was both due to a smaller annual contraction from the oil sector and stronger private sector growth," said Monica Malik, chief economist at Abu Dhabi Commercial Bank. Oil GDP shrank by 0.5%, while initial flash estimates had shown it contracting by 1.4%. Non-oil growth reached 4.9% compared to estimates last month pointing to a 4.2% increase. The impact of lower oil prices may have been blunted by the kingdom's increase of oil output. The kingdom faces a widening budget deficit with the International Monetary Fund saying Riyadh needs a price of oil of over $90 per barrel to balance its books compared to prices of around $60 per barrel in recent weeks. Saudi Arabia, the world's biggest oil exporter, lowered its July prices for Asian buyers at the beginning of June, after Organization of the Petroleum Exporting Countries and allies, known as OPEC+, hiked output for a fourth month. OPEC+ agreed to another big output increase of 411,000 bpd for July, having increased output by the same amount in May and June. Saudi Arabia is in the midst of a costly economic transformation program known as Vision 2030 that aims to wean the economy off oil dependency and has been funneling billions into massive new development projects. Saudi Finance Minister Mohammed Al-Jadaan said the kingdom would "take stock" of its spending priorities in response to a significant decline in oil revenue, the Financial Times reported in May. "We also expect to see some pullback in government spending to limit the widening of the fiscal deficit, which will likely weigh on non-oil growth," said Malik. Daniel Richards, senior economist at Emirates NBD, said that still, the bank believes that spending will remain high. "There is still sufficient project spending already in progress that growth will remain supported through this year and next at least," he wrote in a note. Saudi Arabia is committed to hosting several large international events, each of which require significant spending on construction and development. These include the 2029 Asian Winter Games, set to feature artificial snow and a man-made freshwater lake, and the 2034 World Cup, for which 11 new stadiums will be built and others renovated. Saudi Arabia's 2025 fiscal deficit is forecast at around 101 billion riyals ($27 billion). (Reporting by Pesha Magid; Editing by Toby Chopra)

Tally MSME Honours marks the fifth year of championing MSME innovation and growth
Tally MSME Honours marks the fifth year of championing MSME innovation and growth

Zawya

time2 hours ago

  • Zawya

Tally MSME Honours marks the fifth year of championing MSME innovation and growth

Tally Solutions, a leading international technology provider of business management software, has announced the launch of the fifth edition of its flagship annual initiative- Tally MSME Honours. Building on the momentum of four successful years, MSME Honours continues to recognize and celebrate emerging entrepreneurs who are shaping the future of UAE's MSME ecosystem through innovation, resilience, and impact. Over the last four editions, Tally MSME Honours' has received over 27,000 nominations with over 1500 entries from businesses in the Middle East, making it one of the biggest platforms globally to celebrate MSMEs. This year, Tally expects a record-breaking 20,000 nominations, of which 10% from the Middle East. The winners will be felicitated on International MSME Day, June 27, 2025. The honours will also spotlight MSME success stories from across the GCC. With a focus on lasting impact, Tally MSME Honours goes beyond recognition to elevate and empower entrepreneurial voices. The initiative offers continued opportunities for growth and visibility, with past winners becoming part of a thriving community of changemakers. Through industry panels, business forums, and ecosystem events, they gain a platform to share their journeys, strengthen partnerships, and drive sustained impact.

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into the world of global news and events? Download our app today from your preferred app store and start exploring.
app-storeplay-store