Soaring to new heights: UAE’s GDP set to soar to 5.2 per cent by 2025.

When it comes to breaking records, the UAE is definitely always a step ahead in the game - be it in real estate, leadership, tourism or even the economy.

And this week around, we’re breaking down the exceptional news about UAE’s GDP set to touch new heights - we’ve got all the predictions for 2024 and 2025, so let us break it all down for you…

Back to basics: What is GDP?

For those of you who aren’t economy geeks, and might be wondering what GDP or GDP growth means - we’re here to give you a little refresher course:

GDP - Stands for Gross Domestic Product which measures the monetary value of final goods and services—that is, those that are bought by the final user—produced in a country in a given period of time (say a quarter or a year). It counts all of the output generated within the borders of a country.

When we see GDP rates go up, it means the monetary value and output generated within the country have soared, predicting good growth for the country.

Now to main matters: UAE’s predicted GDP growth for 2024 and 2025:

Last year, in 2023 the UAE’s GDP stood at 3.1%, and now according to the Central Bank of the UAE, we can expect it to soar as high as 4.2% in 2024, while touching peaks of 5.2% in 2025!

In 2023, the Central Bank also forecasted a non-oil GDP growth of 4.7% year-on-year from 2024! On the other hand, oil GDP will see a growth of 2.9% in 2024 soaring all the way up to 6.2% in 2025.

Diving deeper into the GDP figures:

The Central Bank also reported that in the first nine months of 2023, the UAE had a surplus of AED 61 billion in the consolidated fiscal balance - which is the government’s budget balance and this shows how much the government spends beyond what it can generate through taxes and other income.

The UAE’s fiscal balance is about 4.4% of the total GDP of the country. During this time, the total revenue had gone up to around AED 370 billion, and spending was about AED 309 billion.

When we look into the CBUAE report, it's also mentioned that the new federal corporate tax - which was announced in 2023, is expected to help the government's finances and diversify revenue sources that are separate from the oil sector.

Furthermore, the report also shared stats on the non-oil private sector - how the non-oil sector continued to be strong, showing robust economic activity.

Also, in January 2024, the Purchasing Managers' Index was at 56.6, driven by ongoing business coming into the UAE, foreign investment, and imports and exports. This is a positive outlook for the UAE and is based on expectations of sustained demand and sales, supporting the expansion in production and potential new projects and investments coming into the country.

Regarding employment and wage growth in the country, the report showed positive trends indicating a strong future growth scale.

In the private sector, the number of employees increased by 3.1% in Q4 of the previous year, and wages rose by 7.4% compared to the same period in 2022, improving individuals’ purchasing power, and fueling more investment in the country.

Impressive, isn’t it?

Are you keen to know more about the UAE? We recently broke down the news on how the UAE is home to one of the world’s best beaches - here.