IMF raises ‘potential affordability’ concerns, but praises the Emirates’ strong resilience to global uncertainty,
ABU DHABI, UAE – Oct 2 (The CONNECT) – The International Monetary Fund (IMF) is all praise to UAE for showing a “strong resilience to global uncertainty, regional conflicts, and oil market volatility”.
A staff team from the International Monetary Fund (IMF), led by Said Bakhache visited the United Arab Emirates and held discussions with the UAE authorities for the 2025 Article IV Consultation from September 17 – October 1, 2025.
“The UAE has shown strong resilience to global uncertainty, regional conflicts, and oil market volatility. Supported by sustained diversification and expanding exports, the UAE is projected to grow strongly, well above the global average in 2025,” Bakhache said at the conclusion of the visit.
Following an estimated 4 percent growth in 2024, GDP is projected to expand by 4.8 percent in 2025, driven by robust non-hydrocarbon growth and a rebound in hydrocarbon output as OPEC+ production increases, accelerating further to 5.0 percent in 2026, the IMF team said.
Expansion in tourism, construction, and financial services continues to underpin growth, supported by major infrastructure projects. Inflation is projected at 1.6 percent in 2025 and around 2 percent over the medium term.
Housing costs are expected to be the main source of price pressures, raising potential affordability concerns, while tradables remain subdued. Risks to the outlook are broadly balanced, underpinned by strong sovereign buffers and diversification efforts, Bakhache said.
“The UAE is expected to remain resilient to global policy uncertainty. Ongoing efforts to expand Comprehensive Economic Partnership Agreements will further bolster resilience and support diversification, while financial markets and capital flows continue to demonstrate resilience to global shocks, reflecting strong investor confidence. The current account balance strengthened further in 2024, driven by higher goods and services exports, especially non-hydrocarbon exports, and slower growth in imports, he added.
