UAE’s economic growth to accelerate to 4.8% by 2025: Oxford Economics
Non-oil sectors like travel and tourism will grow strongly
Dubai: UAE’s economy will experience accelerated growth and expand to 4.8 per cent in 2025, according to Scott Livermore, ICAEW Economic Advisor and Chief Economist and Managing Director of Oxford Economics Middle East. Livermore attributed the expansion of the non-oil economy, which is expected to grow by 4.6 per cent year-on-year in 2024, state news agency WAM has reported.
He added that non-oil sectors, mainly travel and tourism, will continue to grow strongly, with visitors to Dubai and traffic through DXB reaching record levels. “We expect visitors numbers to continue to expand strongly, growing by over 20 per cent this year and achieving double-digit growth again next,” he said.
Livermore added that the country has faced some challenges, particularly significantly higher interest rates; its economy has weathered the challenge due to the significant government support as growth and diversification plans are implemented. “Investment activity is expected to be strong in the UAE as plans around ‘We the UAE 2031’, D33 in Dubai, and other strategies are implemented,” he explained.
He also emphasised that the UAE is increasing its attractiveness to foreign investors and talent through schemes such as allowing 100 per cent foreign ownership of onshore companies and lowering costs to establish businesses, which have contributed to population growth and bolstered the real estate market. He noted that policymakers also focus on innovative and emerging sectors across finance, creative industries, manufacturing, and other sectors.
Regarding US Federal Reserve interest rates, Livermore said, “We expect the Fed to cut interest rates in September, and it is shifting its focus to the labour market away from inflation, that the Fed is no longer laser-focused on inflation and the risks to the labour market are on its radar.
“We expect the Fed to cut by 50bps by end-2024 and 150bps by end-2025 but the rates cuts could be more frontload if the labour market deteriorates more markedly than we are assuming.”
Livermore also expected the world economy to grow by 2.7 per cent this year and next, noting, “We believe the growing concerns that the US might be slipping towards a recession are unfounded and think recent news remain consistent with a more orderly and benign growth slowdown.”