UAE: IMF revises growth forecast for the Emirates for 2023, 2024

The International Monetary Fund (IMF) on Tuesday revised down the UAE’s growth forecast for this year but upgraded for the next year.

According to the World Economic Outlook released by the Fund, the UAE economy will expand by 3.4 per cent in 2023, down by 0.2 per cent from its previous projection in June, while next year’s forecast has been raised by 0.1 per cent to 4.0 per cent.

The UAE will be the fastest-growing economy in 2028, growing at 4.5 per cent, outpacing Saudi Arabia (3.1 per cent), Oman (3.1 per cent), Bahrain (2.7 per cent) and Kuwait (2.4 per cent).

Last week, World Bank revised up the UAE’s GDP growth forecast for 2023 and 2024 on the back of strong growth in oil and non-oil sectors. It estimated UAE to expand at 3.4 per cent in 2023 and 3.7 per cent in 2024 as compared to earlier forecasts of 2.8 per cent and 3.4 per cent.

Global economy

IMF said the global economy continued to recover slowly from the blows of the pandemic, the conflict in Ukraine, and the cost-of-living crisis.

“Despite the disruption in energy and food markets caused by the war, and the unprecedented tightening of global monetary conditions to combat decades-high inflation, the global economy has slowed, but not stalled. Yet growth remains slow and uneven, with growing global divergences. The global economy is limping along, not sprinting,” it said.

According to its latest projections, world economic growth will slow from 3.5 per cent in 2022 to 3 per cent this year and 2.9 per cent next year, a 0.1 percentage point downgrade for 2024 from July.

It said that projections are increasingly consistent with a soft landing scenario of the world economy, bringing inflation down without a major downturn in activity, especially in the US, where its forecast increase in unemployment is now modest, from 3.6 per cent to 3.9 per cent by 2025.

For advanced economies, the expected slowdown is from 2.6 per cent in 2022 to 1.5 per cent in 2023 and 1.4 per cent in 2024, amid stronger-than-expected US momentum but weaker-than-expected growth in the euro area. For the US, it forecasted 2.1 per cent and 1.5 per cent growth for 2023 and 2024, respectively.

Emerging markets and developing economies are projected to have growth modestly decline, from 4.1 per cent in 2022 to 4.0 per cent in both 2023 and 2024, with a downward revision of 0.1 percentage point in 2024.

It projected consistent growth of 6.3 per cent for 2023 and 2024 for India.

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