Team Blitz India
The International Monetary Fund (IMF) expects the real gross domestic product (GDP) of the UAE to grow by 4 per cent in 2024.
Following the conclusion of the visit of a team of experts regarding the 2024 Article IV consultations, the IMF stated in a statement on May 20 that economic growth in the UAE is broadbased, driven by strong activity in the tourism, construction, manufacturing, and financial services sectors. The IMF also anticipated that the UAE’s fiscal and external surpluses would remain high, supported by relatively high oil prices, said the Emirates News Agency (WAM).
According to the IMF, the overall government surplus is expected to be around 5% of the UAE’s GDP in 2024, while the current account surplus is estimated to be about 10% of GDP for the same year.
“Fiscal and external surpluses are expected to remain high on the back of relatively high oil prices. The general government surplus is projected to be around 5.0 percent of GDP in 2024 and public debt is on track to decline further towards 30 percent of GDP, benefitting from active debt management strategies,” said the IMF statement.
“Capital spending is expected to meet ongoing infrastructure needs, and the introduction of the corporate income tax will support non-hydrocarbon revenue with its full implementation in the coming years. The current account surplus is projected at around 9 percent of GDP in 2024,” it noted. The IMF also found that banks in the UAE generally possess substantial capital and liquidity reserves.
“Banks have considerable capital and liquidity buffers overall, and general asset quality has improved, while credit growth is resilient despite higher domestic interest rates. The central bank intends to restore the reserve requirements to the historical level of 14 percent for demand deposits. We welcome the use of the Dirham Monetary Framework to rein in domestic liquidity and encourage further efforts, as well as continued coordination with the Ministry of Finance on domestic capital market development,” the IMF further stated.
