Scott Livermore, Chief Economist at Oxford Economics Middle East, predicts that the UAE’s economy will grow by 4.8% in 2025, reflecting robust growth in non-oil sectors like travel and tourism, which are set to fuel the nation’s expansion.
Speaking to Emirates News Agency (WAM), Livermore emphasized that the non-oil economy is expected to achieve a 4.6% year-on-year increase in 2024. The UAE’s thriving tourism industry, particularly in Dubai, will play a major role, with visitor numbers and traffic through Dubai International Airport (DXB) set to rise by over 20% this year and continue with double-digit growth next year.
Despite challenges posed by elevated interest rates, Livermore said that strong government support and comprehensive diversification plans have helped the UAE navigate economic pressures. The country’s investment strategies under initiatives like “We the UAE 2031” and Dubai’s D33 are expected to accelerate, solidifying its position as a global investment hub.
Policies aimed at increasing foreign investment, such as allowing 100% foreign ownership of companies and reducing business setup costs, have attracted talent and investment, boosting population growth and the real estate market. The UAE’s focus on emerging sectors like finance, manufacturing, and creative industries is also propelling its economic diversification.
Livermore forecasts that the US Federal Reserve will shift its focus from inflation to labor market health, anticipating interest rate cuts by 50 basis points (bps) in late 2024 and 150 bps by the end of 2025. Global economic growth is projected at 2.7% for 2024, with Livermore dismissing fears of a U.S. recession, seeing instead a gradual slowdown in global growth.
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