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Khaleej Times
25-03-2025
- Business
- Khaleej Times
UAE non-oil economy set to grow 5.2% in 2025, real estate, tourism among major drivers
The UAE's non-oil economy is projected to grow 5.2 per cent this year, driven by tourism, real estate, finance and other sectors, according to an analysis by S&P Global Market Intelligence. 'Real estate will likely continue to grow and remain one of the key growth drivers in 2025. We haven't seen signals that would point to an imminent downturn of the market, which leads us to anticipate further growth of Dubai's and, to a lesser extent, UAE's real estate market in 2025,' Ralf Wiegert, head of Middle East and Northern Africa economics, S&P Global Market Intelligence, told Khaleej Times. Real estate has been one of the major non-oil drivers of UAE –especially Dubai– over the past four years, attracting billions of dirhams of investments every year. He noted that services, including tourism, real estate, financials, retail, and trade and transport will drive non-oil economic growth in the country this year. The growth rate is in line with the International Monetary Fund's (IMF) real GDP growth forecast of 5.1 per cent for 2025—the highest in the Gulf Cooperation Council (GCC) region. Kristalina Georgieva, managing director of IMF, has projected that digital innovation, with artificial intelligence (AI) technologies, is expected to raise UAE's GDP significantly by 2030. 'More R&D spending will further enhance productivity,' she added. She pointed out that reducing the state's footprint in the economy and strengthening governance can yield significant benefits for the Middle East and North African countries. 'For example, Saudi Arabia's regulatory improvements have fostered private sector investment, especially in the non-oil economy. The UAE's National Agenda for Entrepreneurship has supported a vibrant startup community, and Morocco's New Model of Development aims to spur markets by improving public sector governance,' she has said. Oil sector Wiegert said the oil sector will become a growth driver in 2025 given the adjustment to the UAE's oil export quota by Opec. Capital Economics said in a note that rises in oil output from Opec+ starting in April will gradually provide a boost to GDP growth in the Gulf states. 'But if oil prices slide further, governments will likely need to tighten fiscal policy further, weighing on non-oil GDP growth this year,' it said. Newswires reported that the Opec+ group will raise oil output for a second consecutive month in May. It is expected that the group will raise output by 135,000 barrels per day in May 2025.
Khaleej Times
10-02-2025
- Business
- Khaleej Times
MENA economies' growth to be higher than global figures; taxation still priority to tackle debt, says top official
Economic growth in the MENA region will be higher than global economic growth, according to a top official. Arab countries should harness technology and investment opportunities for the benefit of its people, Kristalina Georgieva, managing director of the International Monetary Fund (IMF) said. 'Global growth is projected to hold at 3.3 per cent this year and the next, and then to slow over the next five years, to just above 3 per cent,' she said. 'For the Middle East and North Africa, we expect growth to rebound to about 3.6 per cent in 2025, driven by a recovery in oil production and an easing of regional conflicts.' She was addressing the Arab Fiscal Form at the World Government Summit (WGS) 2025 on Monday when she revealed the figures, adding that despite the encouraging figures, the medium-term outlook for the region sees a weaker growth than before the pandemic. She pointed out that that UAE is a great model for other countries in the region in term of accelerating technological investments. 'Digital innovation, with AI technologies, is expected to raise UAE's GDP significantly by 2030,' she said. She also added that it was important for governments to reduce their involvement in the economy and strengthen the private sector's role. Georgieva commended the UAE's National Agenda for Entrepreneurship for supporting a vibrant startup community. However, Georgieva noted that Arab economies were undergoing various challenges, including inflation, debt and rapid change. 'This region faces the pressing need to create jobs, enhance social safety nets, build resilience to more frequent natural disasters, and support economic diversification,' she said. 'Many countries have debt levels exceeding 70 per cent of GDP. This poses the risk of them becoming trapped in a low-growth, high-debt scenario.' She pointed out that taxation was an effective way to deal with these issues. 'Increasing tax revenues remains a priority,' she said. 'Our research finds significant potential in strengthening domestic tax systems,' she said. 'As new sectors grow, including through digitalisation, they can become an important source of tax revenues. In addition, digitalisation and AI can help modernise tax administrations.' She said that domestic taxes will remain the primary source of funding government spending but countries needed to build an investment-friendly environment. 'Addressing the impact of more frequent natural disasters will potentially require a cumulative $1 trillion in investment by 2030,' she said. 'The financial sector must play a larger role, while governments can enable an investment-friendly environment.' At the conference, UAE's Minister of State for Financial Affairs Mohamed Al Hussaini also said that Arab countries needed to modernise their taxation system. Ingredients of success According to Georgieva, increasing productivity is essential for stronger growth. 'Our research in the Arab region shows how to do it – accelerate digitalisation, reduce the state's footprint in the economy, foster trade diversification, and encourage the free flow of capital to dynamic firms,' she said. She also highlighted the importance of encouraging employment for stronger growth. 'With a growing working-age population, the region has to make the most of its demographic advantage,' she said. 'Creating more private jobs, for women and youth in particular, can lead to more vibrant and inclusive economies. This requires more-flexible labour markets, and investment in education and vocational training.' Georgieva added reallocating resources toward new economic sectors and services like batteries for electric cars and green supply chains as well as deepening regional cooperation is important. 'The GCC is an excellent example of the benefits of regional integration — one that I can imagine can be emulated elsewhere,' she said.
Zawya
10-02-2025
- Business
- Zawya
MENA economies will surpass global growth in 2025 – IMF MD Kristalina Georgieva
Growth of economies in the MENA region will surpass global growth this year at 3.6%, but it will still be weaker than pre-pandemic, so countries must find ways to avoid a low-growth, high debt scenario, Kristalina Georgieva, managing director of the International Monetary Fund (IMF), said at the World Governments Summit in Dubai on Monday Global growth is set to hold at 3.3% this year and next year, and then slow to 3%, which is well below historical average, according to IMF. The MENA region will rebound to 3.6% growth driven by oil production recovery and easing of regional conflicts. 'Digitalised countries have substantially higher productivity than those that are less so, with some in the region the most developed in the world in this area,' Georgieva said. 'Digital innovation with AI Technologies is expected to raise the UAE's GDP significantly by 2030. More research and development spending will further enhance productivity.' Saudi Arabia is an example of a state reducing its footprint in the economy and strengthening governance with regulatory improvements, fostering private sector investment, especially in the non-oil economy, she said. The UAE's National Agenda for Entrepreneurship has supported a vibrant start-up economy and Morocco's New Model of Development aims to spur markets by improving public sector governance, she added. However, while policymakers around the world have succeeded in taming inflation, it is beginning to pick up again in some countries, which could lead to divergence in interest rates and higher borrowing costs for emerging markets and developing economies. Meanwhile, global public debt is set to hit 100% of GDP by 2030 with many MENA countries facing debt levels of 70% of GDP, which risks them becoming trapped in the low-growth, high-debt scenario, Georgieva said. The region must therefore find ways to create jobs, enhance social safety nets and build resilience to more frequent national disasters and support economic diversification, she added. Governments globally are shifting priorities, with the USA being clear it will take action in trade, tax and spending, deregulation and digital assets, she said, meaning, recipes of the past may no longer provide the path to prosperity.
