UAE Economy Set for 2025 Surge: Growth, Trade & Innovation

The United Arab Emirates (UAE) is entering 2025 with the prospects of significant economic growth, due mainly to its diversification, trade activity, and technology initiatives. At Bizzrost we explore these factors in order to show the evolving narrative in the UAE economy.Projected Growths OverallThe UAE economy is forecast to grow 4.7% in 2025 according to the Central Bank of the UAE, in part because of the countries diversification around the economy, and more importantly non-oil economic sectors. The main drivers of projected growth in the economy include:

• Expansion of non-oil sectors including tourism, finance, and technology.
• Increase in foreign direct investment resulting from efficient and effective business policy.
• Trade policies improving strategic alliance opportunities.

Trade and non-oil sector performanceThe first nine months of 2024 saw non-oil foreign trade for the UAE increase by 14.9% YoY, surpassing AED 2.0 trillion. In terms of non-oil exports, these grew by 32.9% (AED 396.2 billion) for the period January to September 2024, with gold and jewellery accounted for the majority of the total.Top three non-oil export partners

• India (13.5%)
• Turkey (9.8%)
• Hong Kong SAR (9.3%)

Diversity in trade means less reliance on oil revenues and potential to strengthen economic resilience, which is vital going forward.Technology and InnovationThe UAE is committed to spending money on technology and innovation to encourage the future growth of its economy. Initiatives include:

• Progression of artificial intelligence capacities
• Promotion of digital transformation of industries
• Access to support for start-ups and tech entrepreneurs.

The UAE is positioning its economy to compete as a global innovation and technology hub.Fiscal Policies and Economic HealthThe International Monetary Fund (IMF) believes the UAE’s fiscal surplus could reach about 4% of GDP in 2025, down from 5% last year, supported by strong growth in non-hydrocarbon revenue and modest public debt levels at about 30% of GDP.Implications:

• Continued capital investment in public services and infrastructure
• Increased investor confidence through fiscal discipline
• Sustainable long-term growth with multiple revenue-generating capacity.

ConclusionAverage warp speed ahead, the UAE’s focus on diversification, service productivity growth, technological sophistication, and fiscal discipline is expected to drive their economy forward to a bright 2025. The team at Bizzrost is dedicated, as always, to providing the insights and gives, aligned, into and underneath the national priorities so that your business and investment cannot be easily disrupted in an ever-changing economy.