S&P projects UAE economy to grow over 5% in 2024

The UAE’S GDP is expected to expand by over 5% in 2024, exceeding the 2.8% growth expected for the global economy, according to S&P Global Ratings projections.

Tatiana Leskova, Associate Director of Corporate Ratings at Standard and Poor's Global Ratings, told the Emirates News Agency (WAM) that “While the global economy remained subdued operating at subpar growth levels, we estimate that UAE'S GDP expanded at over 3% in 2023, including close to 6% growth for the non-oil sector”.

“In Dubai, we expect continued strong momentum in the hospitality, wholesale and retail, and financial services sectors to drive growth in 2024-2025,” she explained.

Asked about the performance of the UAE'S real estate sector in the face of global economic changes, Leskova said, “So far, the UAE and Dubai more specifically have remained relatively immune to the global economic headwinds, thanks to the limited sensitivity to interest rates and contained inflation. Despite higher interest rates, the number of mortgage transactions continued to grow in Dubai, where over 80% of real estate transactions are completed on a cash basis. In contrast, the European real estate market has been marked by weakened purchasing power since 2022 due to high interest rates and relatively higher inflation.”

She further said that the China market also remains challenging for its leveraged developers, with margins tightening as prices drop, pressuring profitability. The picture has become a little brighter in the US, where demand picked up at the start of 2023 after a slowdown.

“The profile of buyers evolved slightly since 2022, with a sharp increase in Russian buyers becoming one of the largest investor groups in Dubai,” Tatiana explained.

“We expect this to be temporary, with Indians, Europeans and GCC buyers remaining the largest investors as per the historic trend. Dubai still remains far more attractive as an investment opportunity than other emirates despite news of gaming hotels in RAK, and general economic growth in the country overall,” she added.

In Dubai, we expect continued strong momentum in the hospitality, wholesale and retail, and financial services sectors to drive economic growth in 2024-2025 TATIANA LESKOVA