The UAE is poised for positive economic growth as it is projected to achieve a 3.6 percent increase in its gross domestic product this year, driven by robust domestic activity, said the International Monetary Fund.
Following an impressive growth rate of 7.9 percent in 2022, the UAE’s economy is expected to maintain its upward trajectory in 2023, benefiting from sustained tourism activity and higher capital expenditure, the IMF said in its 2022 Article IV assessment.
IMF said the UAE’s non-hydrocarbon sectors would grow by 3.8 percent this year, primarily driven by strong domestic reforms.
However, the international body said that the emirate’s economic outlook is not without risks. The global landscape remains uncertain, encompassing weaker growth, tighter financial conditions and geopolitical developments.
Nevertheless, it added that the UAE’s implementation of comprehensive reform efforts presents potential upside risks for medium-term growth.
“Inflation has risen with global trends but is expected to ease to 3.4 percent in 2023. Fiscal and external surpluses are expected to remain high on the back of elevated oil prices. Banks are adequately capitalized and liquid overall, but nonperforming loans remain elevated, albeit down from recent peaks, and real estate prices have risen sharply in some segments,” the IMF stated.
It emphasized the positive impact of the country’s ambitious reform initiatives outlined in the UAE 2050 Energy Strategy.
These efforts have successfully stimulated trade and attracted foreign direct investments, solidifying the country’s position as an attractive destination for international businesses.
