The UAE could achieve a striking 7% annual economic expansion in the near future, contingent on sustained declines in global interest rates and inflation, according to Economy Minister Abdulla bin Touq Al Marri. In an interview with CNBC Arabia, Al Marri emphasized that this ambitious target—reiterated since 2023—aligns with the nation’s broader vision to boost its GDP to AED 3 trillion by 2031.
While acknowledging that persistent inflation and elevated borrowing costs have tempered global investments in recent years, Al Marri highlighted the UAE’s resilience, noting its 4-6% growth trajectory still outpaces the worldwide average of 2-3%. The minister projected a 5-6% rise in GDP for 2025, up from an anticipated 4% in 2024, driven by breakthroughs in technology, renewable energy, trade, financial services, and infrastructure.
Divergent Forecasts Highlight Economic Uncertainty
Not all analysts mirror this optimism. Fitch Solutions’ BMI adjusted its 2024 UAE growth forecast downward to 5.1%, while the IMF and World Bank peg expansion at a modest 4%. In contrast, the Central Bank of the UAE (CBUAE) struck a more bullish tone, revising its 2025 estimate to 4.5% in December. These disparities underscore the complex interplay of global headwinds and domestic reforms shaping the UAE’s economic landscape.
Cooperatives Sector Set for Transformation
In a strategic pivot, Al Marri announced plans to introduce six new regulatory frameworks under the cooperatives law by mid-2025, targeting health, education, and retail sectors. This initiative aims to amplify the cooperatives sector’s GDP contribution from 1.1% to 5%, fostering community-driven enterprises and diversifying economic participation.
As the UAE navigates fluctuating global dynamics, its focus on innovation, regulatory modernization, and sectoral diversification positions it to defy broader economic sluggishness. Whether Al Marri’s 7% vision materializes may hinge on how swiftly external pressures ease—and how effectively the nation’s reforms unlock new growth engines.
Source: https://enterprise.news/