The UAE’s GDP is expected to expand by over 5 percent in 2024, exceeding the 2.8 percent growth expected for the global economy, according to Standard & Poor’s (S&P) Global Ratings projections. Tatiana Leskova, Associate Director of Corporate Ratings at S&P Global Ratings, told the Emirates News Agency (WAM) that “while the global economy remained subdued operating at subpar growth levels, we estimate that UAE GDP expanded at over 3 percent in 2023, including close to 6 percent 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 percent 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.

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 U.S., 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,” she went on to explain, “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.”

Meanwhile, economic uncertainty expected in 2024, WEF survey predicts.

A survey of global chief economists by the World Economic Forum (WED) on Monday predicted the global economy to see a year of downturn and uncertainty, facing headwinds from tough financial conditions, geopolitical tensions, and the rise of artificial intelligence.

According to the latest Chief Economists Outlook released on Monday, more than half (56 percent) of the leading economists surveyed projected that the global economy would weaken in 2024, while 43 percent predicted the economy to maintain or gain momentum. A large majority also believes that labour markets (77 percent) and financial conditions (70 percent) will improve over the next year.

Although the expectations for high inflation have been pared back in all regions, regional growth outlooks vary widely and no region is slated for very strong growth in 2024.

“The latest Chief Economists Outlook highlights the precarious nature of the current economic environment,” said Saadia Zahidi, Managing Director, World Economic Forum. “Amid accelerating divergence, the resilience of the global economy will continue to be tested in the year ahead. Though global inflation is easing, growth is stalling, financial conditions remain tight, global tensions are deepening and inequalities are rising - highlighting the urgent need for global cooperation to build momentum for sustainable, inclusive economic growth.”

The outlook for South Asia and East Asia and Pacific remains positive and broadly unchanged compared to the last survey, with a strong majority (93 percent and 86 percent respectively) expecting at least moderate growth in 2024. China is an exception, with a smaller majority (69 percent) expecting moderate growth as weak consumption, lower industrial production and property market concerns weigh on the prospects of a stronger rebound.

In Europe, the outlook has weakened significantly since the September 2023 survey, with the share of respondents expecting weak or very weak growth almost doubling to 77 percent. In the United States and the Middle East and North Africa, the outlook is weaker too, with about six in 10 respondents foreseeing moderate or stronger growth this year (down from 78 percent and 79 percent respectively). There is a notable uptick in growth expectations for Latin America and the Caribbean, sub-Saharan Africa and Central Asia, although the views remain for broadly moderate growth.

WAM