Today's Edition
A.SREENIVASA REDDY (ABU DHABI)
The UAE's non-oil economy remains on a solid growth trajectory, with momentum expected to continue into 2025, fuelled by robust demand in tourism, trade, and finance, according to a report from S&P Global Market Intelligence.
While the UAE’s manufacturing sector could face headwinds from escalating global trade conflicts, its competitive position remains strong. “A major negative impact from tariffs on UAE’s exports is unlikely, given the country’s well-established trade relationships,” the report said.
In the oil sector, the UAE’s production levels are set to increase in 2025 following an adjustment to the country’s OPEC quota. This expansion is expected to boost overall economic growth, with S&P Global Market Intelligence projecting total GDP growth, including both oil and non-oil sectors, at 5.0% in 2025 and 4.9% in 2026.
When asked if the latest forecast was any different from the previous forecasts, Ralf Wiegert, Head of S&P Global Market Intelligence Middle East and Northern Africa economics, told Aleithad: “The forecast remained almost the same between the February and March updates as we did not anticipate an adverse impact from weakening global growth – yet.” Nevertheless, the potential for such an impact to materialise in the future cannot be discounted, he added.
Despite a potentially weak oil price outlook, the UAE's current account and fiscal balance are forecast to remain in healthy surplus, the report said.
Inflationary pressures are expected to remain subdued, with average consumer price inflation forecast at 1.9% for 2025. Monetary policy is anticipated to remain steady, with the next policy rate reduction is projected for December 2025.
With sustained momentum in key sectors and stable macroeconomic indicators, the UAE is well-positioned to navigate global uncertainties while maintaining its economic resilience in the coming years, the report suggested.
