The Central Bank of the United Arab Emirates (CBUAE) has revised upwards its GDP growth projection for 2024 to 4% from 3.9% previously, citing improved performance in the oil sector, according to its Quarterly Economic Review released on September 26.

The bank forecasts GDP growth to accelerate to 6% in 2025, driven by continued momentum in the non-hydrocarbon sector and a significant pickup in hydrocarbon production.

Non-hydrocarbon GDP growth is expected to remain strong at 5.2% in 2024 and 5.3% in 2025, supported by tourism, transportation, financial services, construction, real estate, and communications sectors. Meanwhile, the hydrocarbon sector is projected to grow by 0.7% in 2024 and 7.7% in 2025.

The CBUAE noted that strategic government plans, ongoing structural reforms, and initiatives to attract foreign investment continue to support non-oil GDP growth.

The fiscal balance for the first quarter of 2024 remained positive at AED 23.5bn (USD 6.4bn), representing 4.9% of GDP.

Consolidated budget revenue in Q1 2024 increased by 4.3% year-on-year to AED 120.6bn, driven by a 32.5% rise in tax revenues.

Government expenditure in Q1 2024 totaled AED 97.1bn, a 5% y/y increase. Major expenditure categories, including compensation of employees, use of goods and services, and social benefits, all saw increases.

The number of employees covered by the CBUAE Wage Protection System remained flat y/y in June 2024, while average employee salary increased by 4.8%. The bank said these positive readings for employment and wage growth point to robust domestic consumption and sustainable GDP growth going forward.

The UAE's 16 non-oil sectors continued their robust growth pattern in Q2 2024, albeit at a more moderate rate. Wholesale and retail trade, manufacturing, and construction remained key pillars of the non-oil sector expansion.