Latest news with #GlobalEconomicProspects'
Arabian Post
7 hours ago
- Business
- Arabian Post
UAE Growth Outlook Brightens on Non‑Oil and Oil Resurgence
UAE's economy is set to expand by 4.6% in 2025, bolstered by a strong non‑oil core and a gradual return in oil output, according to projections from the World Bank's June 'Global Economic Prospects' edition. This represents a 0.6‑point upward revision from January. The outlook for 2026 has also been upgraded to 4.9%, with growth anticipated to hold at that level in 2027. At the heart of the upgrade is a projected 4.9% expansion of non‑oil sectors in 2025, fuelled by robust performances in tourism, construction, transportation and financial services. Dubai's aviation boom—revealed by a 10% rise in passenger volume, reaching 147.8 million in 2024—underpins much of this resilience, reinforcing the emirate's role as a global travel hub. Abu Dhabi Airport similarly saw passenger numbers surge to 29.4 million, marking growth of over 28% year‑on‑year. Support from non‑oil diversification has been a long‑term objective of UAE policy. The nation now boasts one of the most diversified economies in the Gulf, with less reliance on hydrocarbons than its neighbours. Strategic infrastructure projects and reforms—such as streamlining business regulation and expanding economic partnership agreements—have reinforced this shift. ADVERTISEMENT The World Bank highlights a phased easing of OPEC+ oil‑production cuts between May 2025 and September 2026 as another key driver. The resumption of oil output is expected to boost oil‑GDP, even amid pressure from softer global oil prices. While the group plans to increase production by 411,000 barrels per day through mid‑2026, this will likely offer a measured uplift to gross domestic product. UAE's fiscal strength is also supported by oil revenues, though the government foresees a narrowing of its fiscal surplus to approximately 4.2% of GDP in 2025, according to World Bank estimates. Strong international reserves—estimated at US$223 billion as of November 2024—and comprehensive tax reforms, including the introduction of a minimum domestic top‑up tax in January 2025, provide further fiscal buffers. This macroeconomic outlook aligns with official growth readings for 2024. The UAE recorded real GDP growth of 3.9%, underpinned by a 4.6% climb in the non‑oil sector. These historic gains paved the way for the stronger forecasts now issued for 2025 onwards. Globally, the World Bank warned of slumping growth—forecast at just 2.3% in 2025, the slowest outside recessions since 2008—due to trade tensions and policy uncertainty. Nearly 70% of national forecasts worldwide were downgraded as rising tariffs and sluggish demand took their toll. By contrast, growth in Gulf Cooperation Council economies, including the UAE, remains resilient, with peer forecasts of 3.2% in 2025, and 4.5% and 4.8% in 2026 and 2027 respectively. Employment performance is expected to stay strong, with projected job growth at around 3.3% year‑on‑year in 2025 and unemployment holding at low levels, though youth and female unemployment may remain elevated. The central bank reported that hotel occupancy averaged 78% in 2024—a level sustained through 2023—highlighting the consistent strength of tourism. Logistics and trade remain potential areas of vulnerability. The World Bank cautioned that this sector could see 'ongoing trade uncertainties and disruptions' which may constrain expansion. The global policy outlook, hinging on resolution of trade disputes and geopolitical stability, will shape the UAE's growth trajectory into the medium term.
Scroll.in
2 days ago
- Business
- Scroll.in
World Bank retains India's 2025-'26 GDP growth forecast at 6.3%
India's economy is projected to grow at a rate of 6.3% in the financial year 2025-'26, a World Bank report said on Tuesday. In its latest 'Global Economic Prospects' report, the international financial institution retained its gross domestic product growth forecast for the current fiscal, which it had cut by 40 basis points in April. A basis point is one-hundredth of a percentage point. Basis points are used to describe the percentage change in the value of a financial instrument. The World Bank, however, flagged concerns about a potential slowdown in investment due to global economic uncertainty. India will be the fastest-growing large economy in the world at the projected rate, the report said. The bank also cut its growth forecast for India by 20 basis points for 2026-'27 to 6.5%. The gross domestic product is expected to grow at 6.7% in 2027-'28, with economic activity 'partly supported by robust services activity that contributes to a pick up of exports'. The retention of the 6.3% growth forecast for India by the World Bank comes days after the Reserve Bank of India announced a larger-than-expected 50 basis point cut in its policy repo rate on June 6, bringing it down to 5.5%. The repo rate is the interest rate at which the central bank lends money to commercial banks. The Reserve Bank of India's Monetary Policy Committee decides on changes to it every two months. Central banks usually reduce repo rates to stimulate economic growth by making borrowing cheaper for individuals and businesses. This translates to lower equated monthly instalments for borrowers. World Bank cuts global growth forecast of 70% economies The World Bank also made reductions to growth forecasts for nearly 70% of the economies due to 'heightened trade tensions and policy uncertainty'. This is expected to drive down the global growth in 2025 to 2.3%, the slowest pace since 2008 outside of outright global recessions, The Indian Express reported. In January, global growth for 2025 was projected to be 2.7%. In 2026, growth is expected to pick up only slightly to 2.4%, a decrease from the 2.7% previously predicted in January. While a worldwide recession is not expected, the projected average global growth for the first seven years of the 2020s is set to be the slowest since the 1960s if these predictions hold true. The World Bank said that global growth could rebound more rapidly than the current forecast if major economies manage to de-escalate trade tensions. This will reduce policy uncertainty and financial volatility, it added. 'The analysis finds that if today's trade disputes were resolved with agreements that halve tariffs relative to their levels in late May, global growth would be 0.2 percentage point stronger on average over the course of 2025 and 2026,' the financial institution said. On April 2, the United States announced 'reciprocal' tariffs on dozens of countries, including a 26% 'discounted' levy on India. US President Donald Trump had repeatedly said he intended to impose a reciprocal tax on India, among others, citing the high tariffs the countries impose on foreign goods.
