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World Bank raises UAE growth forecast for 2023 and 2024

Key sectors such as travel and tourism, aviation, hospitality, real estate, trade and logistics have driven the country’s economic growth.

The World Bank has revised the UAE’s GDP growth forecast for 2023 and 2024 thanks to strong growth in the oil and non-oil sectors.

The latest figures released by the World Bank showed that the UAE economy is estimated to expand by 3.4 percent in 2023 and 3.7 percent in 2024, compared to previous forecasts of 2.8 percent and 3.4 percent.

In the post-pandemic period, key sectors such as travel and tourism, aviation, hospitality, real estate, trade and logistics have driven the UAE’s economic growth and helped the country accelerate recovery.

He International Monetary Fund He also previously said that the UAE economy has quickly survived the economic impact of COVID-19, with strong near-term economic growth, supported by a rebound in domestic activity, while high oil prices support high surpluses in the fiscal and external balances.

However, the UAE’s GDP will slow from 6.6 per cent last year after Gulf economies in the region peaked after hitting record lows during the pandemic years.

In the GCC region, growth in 2023 is projected to average 1 percent, 2.2 percentage points lower than forecast in April 2023 and considerably lower than 7.3 percent in 2022.

The World Bank projected in its October report that, as a result of lower oil production levels amid subdued prices, economic activity in Saudi Arabia is projected to contract by 0.9 percent in 2023, a sharp decline. from 8.7 percent in 2022.

“Growth in the remaining GCC economies is also expected to slow sharply due to less favorable prospects in the oil market.”

However, economic activity in the GCC is expected to recover in 2024, assuming OPEC+ production quotas are relaxed.

“Among developing oil exporters, the slowdown is less marked. Its expected growth in 2023 is 2.4 percent, down from 4.3 percent in 2022. Among developing oil importers, the average forecast for 2023 is 3.6 percent, down from 4.9 percent. percent in 2022.”

said the World Bank.

Projected growth in the Middle East and North Africa (Mena) region in 2023 is closer to the global average, unlike 2022, when the region dramatically outperformed the rest of the world. Global activity is forecast to slow to 2.5 percent in 2023, down from 3.1 percent in 2022, according to the latest edition of the World Bank’s Mena Economic Update.

The region’s GDP is forecast to fall to 1.9 percent in 2023 from 6 percent in 2022, due to cuts in oil production amid subdued oil prices, tight global financial conditions and high inflation.

By the end of 2023, only 8 of 15 Mena economies will have returned to pre-pandemic real GDP per capita levels.

Similarly, cuts in oil production and low oil prices are depressing the current accounts and fiscal balances of Mena oil exporters. In the GCC, the current account balance is expected to fall to 9.6 percent of GDP, from a high of 15.7 percent.

in 2022. The fiscal surplus is expected to decline sharply to 0.8 percent of GDP from 4.9 percent in 2022.

News Source: Khaleej Times

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