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Scott Livermore, Chief Economist and Managing Director of Oxford Economics Middle East, expects economic growth in the UAE to accelerate to 4.8% next year.
Scott, who is also the economic adviser to the Institute of Chartered Accountants in the UAE, told Emirates News Agency that the economic growth is supported by the strong performance of the non-oil economy, which is expected to continue its strong performance, growing by 4.6% year-on-year during the current year.
Extensive growth
Scott believes that non-oil sectors, including tourism and travel, will achieve broad-based growth and will be key drivers of the UAE’s economic growth, pointing to the record number of visitors to Dubai and passenger traffic through Dubai International Airport. He expects visitor numbers to continue to rise strongly, with growth estimated at more than 20% this year, and to achieve double-digit growth again in 2025.
He explained that the UAE economy has succeeded in facing global challenges and difficulties, especially high interest rates, supported by strategic government support while continuing to implement growth plans and diversify the economy, noting that the UAE has succeeded in achieving significant diversification of its economy, away from oil over the past two decades, with a move towards enhancing growth and sustainability in non-oil sectors.
Strong activity
Scott expected that investment activity in the UAE would be strong in the coming period, with the implementation of many strategic initiatives and plans, including “We the Emirates 2031” and the Dubai Economic Agenda “D33”, in addition to many other strategies.
Pointing out that the UAE continues to work on increasing its attractiveness to foreign investors and talents, through plans and programmes such as allowing foreigners to own 100% of local companies and reducing the costs of establishing companies.
He pointed out that the population growth in the country has been significantly reflected in the real estate market. He explained that the real estate market in the UAE is expected to remain strong with the entry of new projects and units into the market, and that other sectors such as travel, tourism, digital technology, finance and investment will achieve strong performance, as they are strategic sectors and a major driver of growth.
Innovative sectors
He explained that policy makers in the UAE are also focusing on innovative and emerging sectors in the financial, creative, manufacturing and other sectors, which qualifies them for further growth alongside sectors that benefit primarily from population growth, most notably real estate and education.
Asked about his expectations for the GCC economies, Scott said economic growth is expected to double to more than 4.4% in 2025, with economic growth in the Middle East expected to reach around 2.1% in 2024, accelerating strongly to 3.7% in 2025.
The chief economist and managing director of Oxford Economics Middle East believes that non-oil economies will continue to grow in the GCC countries, and that the overall budget of the GCC countries is likely to achieve a surplus. He pointed out that the overall financial position of these countries is strong, which is reflected in positive credit ratings, allowing them to access financing through capital markets and initial public offerings.
Regarding his expectations for global interest rates, Scott said that the US Federal Reserve cut interest rates this month, as expected, as its focus shifted to the labor market instead of inflation; it is no longer entirely focused on inflation.
The risks to the labor market are now in his sights, and he also expects the Federal Reserve to cut interest rates by 50 basis points by the end of 2024, and 150 basis points by the end of 2025, noting that interest rate cuts could be more severe if the labor market deteriorates more clearly than we assume.
Scott expects the global economy to grow by 2.7% this year and next, stressing that there is no basis for growing fears that the United States may enter a recession, as recent data shows that it will remain consistent with a more orderly and calm slowdown in growth.
* The UAE has succeeded in achieving significant diversification of its economy away from oil over two decades.
* Tourism and travel are growing at a large scale and are key drivers of growth.
