Analysts predict resilience will characterize the UAE's economic outlook for 2025, as the nation maintains financial stability despite regional turmoil.
Key drivers include strong consumer spending, record foreign direct investment (FDI), and effective economic diversification. The UAE's role as a global trade hub connecting Europe, Africa, and Asia, along with its reputation as a real estate haven, supports its growth trajectory.
October saw record real estate activity, with 19,390 residential transactions, bringing the year-to-date total to 140,000 units, a 36% increase year-on-year.
GDP forecasts for 2025 range from 6.2% by the Central Bank of the UAE (CBUAE), 5.1% by the IMF, to 4.1% by the World Bank. Inflation has gradually declined, reaching 2.4% year-on-year in October, the slowest since August 2023.
The monetary easing cycle initiated by the Federal Reserve and mirrored by the CBUAE is expected to lower interest rates further, boosting economic growth in 2025.
While the outlook remains optimistic, risks include restricted oil revenues due to declining oil prices, exacerbated by oversupply from non-OPEC countries and a slowing Chinese economy. However, China’s anticipated shift to a moderately loose monetary policy in 2025 could stabilize demand.
Gold prices are also a critical factor, with potential gains reflecting increased haven demand during uncertain times. The UAE faces challenges in maintaining its safe-haven status amid expected global turbulence in 2025.