IMF Hails UAE’s Resilience as Growth Forecast Raised to 4.8% in 2025
The United Arab Emirates is set to outpace global growth this year as diversification, expanding exports and resilient financial markets underpin its economy, according to the International Monetary Fund.
Following a two-week mission to the country, the IMF projected GDP growth of 4.8 per cent in 2025, accelerating from 4 per cent in 2024, with output forecast to rise further to 5 per cent in 2026 as oil production under OPEC+ quotas increases. Non-hydrocarbon activity in tourism, construction and financial services is expected to remain the main growth driver, supported by large-scale infrastructure projects.
Inflation is forecast at 1.6 per cent in 2025 and about 2 per cent in the medium term, with housing costs flagged as a key source of price pressure. “The UAE has shown strong resilience to global uncertainty, regional conflicts and oil market volatility,” said Said Bakhache, who led the IMF team.
The Fund noted that the current account surplus strengthened in 2024 on the back of higher goods and services exports and slower import growth. It praised the country’s “prudent” fiscal stance, supported by the roll-out of corporate tax and indirect levies, while highlighting scope for greater fiscal coordination between federal and emirate-level authorities.
The UAE’s banking system was described as “sound and well-capitalised,” with strong liquidity buffers, declining non-performing loan ratios and double-digit deposit growth. Credit expansion and conservative prudential rules, including new countercyclical capital buffers, were said to be containing vulnerabilities.
Financial sector modernization is progressing, the IMF added, citing the development of the Digital Dirham, stablecoin regulation, and improvements in monetary policy transmission. But it urged continued vigilance over buoyant real estate activity, potential risks from tokenisation, and the rapid expansion of virtual assets.
The Fund welcomed the UAE’s removal from the Financial Action Task Force’s “grey list” earlier this year following reforms to anti-money laundering and counter-terrorist financing frameworks, but pressed for continued regulatory alignment and supervisory strengthening.
Looking ahead, the IMF said investments in technology, artificial intelligence, and climate adaptation would be critical to sustaining diversification. It also encouraged further improvements in fiscal and balance of payments data to bolster transparency and policymaking.
