UAE’s 2023 economic outlook remains ‘positive’ says IMF

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The UAE’s economic outlook remains ‘positive’, underpinned by strong domestic activity, the International Monetary Fund said on Monday. 

The country’s GDP is slated to grow at 3.6 percent in 2023, with non-hydrocarbon growth of 3.8 percent driven by continued tourism activity and higher capital expenditure, the Washington-based fund said in a statement.

The outlook remains subject to significant global uncertainties, including weaker growth, tighter financial conditions and geopolitical developments. 

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The IMF said inflation, driven higher as a result of global trends, is expected to ease to 3.4 percent this year. 

Fiscal and external surpluses are expected to remain high as a result of elevated oil prices. Although banks are adequately capitalised and liquid overall, non-performing loans remain elevated, albeit down from recent peaks. 

Real estate prices, in contrast, have risen sharply in some segments.

UAE economic growth strengthened in 2022, aided by a rapid and effective Covid-19 response and supportive fiscal measures, as well as social and business-friendly reforms. Overall growth is expected to reach 6.9 percent in 2022, with non-hydrocarbon GDP growth of 5.3 percent. Hydrocarbon GDP is likely to grow by 11.1 percent in 2022. 

The IMF said advancement in comprehensive economic partnership agreements will boost trade, drive integration in global value chains and attract foreign direct investments amid strong reform efforts as part of the UAE 2050 strategies.

In its recent quarterly economic review, the Central Bank of the UAE kept its growth forecast unchanged at 4.3 percent for 2024.

The country’s economy continued to grow at a solid pace in Q1 2023, reflecting a strong non-oil sector performance, partially offset by a moderation in the oil segment of the economy, the apex bank said.