Economic outlook and geopolitics

Most chief economists are optimistic about sustained global growth, with 80% expecting the global economy to either improve or stabilize this year as per the World Economic Forum’s Chief Economists Outlook. The report also highlights the increasingly complex landscape leaders are navigating. 97% of respondents anticipate geopolitics to contribute to global economic volatility. It is therefore crucial to set policies that will revive the global economy and lay the foundation for more inclusive, sustainable and resilient growth. Asian economies, particularly in South Asia and East Asia and Pacific, are also expected to grow moderately.

Additionally, the overall health of the global economy, monetary policy, financial and labour markets, geopolitics and domestic politics are all factors likely to affect corporate decision-making. According to 86% of chief economists, political and economic stress will be a growing challenge for decision-makers this year, and 79% expect increased complexity to impact decision-making.

High-income countries are expected to see growth driven by technological advancements, artificial intelligence and green transition, while low-income economies stand to benefit more from interventions in institutions, social services and access to finance. There is, however, a significant lack of agreement on how environmental and industrial policies affect growth.

The GCC region is expected to see economic growth rebound to 2.8% in 2024 and 4.7% in 2025, with the UAE and Saudi Arabia driving this recovery. This growth is largely attributed to the forecasted increase in oil production during the second half of 2024 and a global economic recovery, as projected by the World Bank. The region’s focus on diversifying its economies highlights its strategic approach to achieving resilience and sustainable development during global volatility.

The UAE is implementing various structural reforms and making strategic investments to diversify its economy and boost its industrial capabilities. Significant initiatives include Abu Dhabi's USD 10 billion investment in tourism infrastructure, ADNOC Gas's USD 13 billion plan to expand gas operations globally and locally over the next five years, and Dubai’s approval of a public-private partnership portfolio valued at USD 10.9 billion.

In 2024 and 2025, the UAE is set to remain the fastest-growing economy in the GCC region due to its ability to increase oil production earlier than other OPEC+ nations. Growth in the Gulf is also expected to accelerate as oil output rises from October 2024, while non-oil sectors continue to expand.

Driven by its diversification efforts and strong trade relationships with neighboring countries, the UAE’s economy is forecasted to achieve 6.7% growth in 2025, a significant increase from 3.8% this year. The nation’s positive economic outlook is supported by its thriving tourism sector and continued economic expansion.

Dubai particularly saw a surge in international visitors, with 1.77 million in January and 1.9 million in February 2024. Additionally, hotel guest spending is projected to rise from USD 723.4 billion in 2023 to USD 758.61 billion in 2024, according to the Department of Economy and Tourism (DET).

The UAE ranked 10th in the world in the 2023 Soft Power Index. This is its highest-ever global ranking, marking its fourth consecutive year as the leading nation in the Middle East. The index evaluates a country’s ability to influence others through cultural appeal, diplomatic relations, education, business and trade, governance, and digital engagement.
Beyond its robust economic influence (hard power), the UAE fosters cultural exchange, tourism and global connectivity (soft power). Investments in aviation infrastructure by flagship airlines like Emirates and Etihad have extended the nation’s geopolitical reach to over 150 destinations worldwide.

The UAE also ranks highly in terms of safety and security, having low crime rates and an absence of domestic terrorism. Abu Dhabi topped Numbeo’s 2024 Safety Index as the world’s safest city, with Dubai ranking highly as well at fourth place. According to the 2024 Gitnux Marketdata Report, the UAE is recognized as the third safest country globally. Additionally, the UAE is a responsible global actor and continues to provide relief supplies to countries in need, including medical and foreign aid to various developmental, humanitarian and charitable projects.

In the 2024 World Competitiveness Report, the UAE went up three places to secure 7th place globally, surpassing nations like Norway, Iceland, Japan, Canada and Finland. Noteworthy achievements include ranking first globally in employment, internet usage and resolution of industrial disputes. The UAE also ranked second in government policy adaptability, tourism revenues and bureaucratic efficiency.

For the third consecutive year, the UAE is set to retain its status as the world’s leading destination for wealthy migrants with an estimated 6,700 individuals expected to relocate by the end of 2024, ahead of the US, Singapore and Canada. According to the Henley and Partners’ 2024 Private Wealth Migration Report, the influx of millionaires from the UK will significantly boost the UAE’s millionaire population, contributing to foreign exchange reserves.

These migrating millionaires, comprising approximately 20% entrepreneurs and company founders, can stimulate the local economy by opening new businesses and providing new employment opportunities.