Today's Edition
A. SREENIVASA REDDY (ABU DHABI)
The UAE is projected to grow at 4% in 2025 and 5% in 2026, according to the latest World Economic Outlook released by the International Monetary Fund (IMF) on Tuesday. The real GDP growth in 2024 in the UAE is put at 3.8%.
The IMF projections for the UAE more or less remained at the same level predicted in the October World Economic Outlook report at a time when the projections for almost all countries are downgraded due to policy uncertainty created by the new tariff policy launched by US President Donald Trump.
Another big economy in the region, Saudi Arabia, is projected to grow at 3% in 2025 and 3.7% in 2026. Its growth in 2023 is put at 1.3%.
Globally, the IMF expects economic growth to weaken over the next two years. Global growth is projected to drop to 2.8% in 2025 and 3% in 2026—down from 3.3% for both years as forecast in the January 2025 World Economic Outlook update. These figures are also well below the historical average of 3.7% recorded between 2000 and 2019.
Advanced economies are expected to post modest growth of 1.4% in 2025. The United States is forecast to slow to 1.8%, marking a downward revision of 0.9 percentage point from the IMF's earlier January projection. The downgrade is attributed to increased policy uncertainty, trade tensions, and weakening demand.
The US is projected to grow at 1.7% in 2026 as against the earlier projected rate of 2.1%. Similarly, growth in the euro area is expected to slow to 0.8% in 2025, a downward adjustment of 0.2 percentage point. Projection for 2026 is downgraded from 1.4% to 1.2%.
In emerging market and developing economies, growth is forecast to decline to 3.7% in 2025 and slightly recover to 3.9% in 2026. The IMF notes significant downgrades for countries most affected by recent trade measures, including China.
Inflation is also expected to persist at elevated levels. Global headline inflation is forecast to decline to 4.3% in 2025 and 3.6% in 2026. However, the pace of this decline is slower than previously anticipated, with notable upward revisions for advanced economies and slight downward revisions for emerging and developing markets.
