IMF Staff Country Reports

The 2024 Article IV Consultation discusses that United Arab Emirates (UAE) economic growth remains strong, driven by robust domestic activity. Non-hydrocarbon growth has benefitted from healthy tourism flows and increased activity in the construction, manufacturing, and financial services sectors. The UAE has continued to experience strong capital inflows, reflecting commodity revenue, safe haven flows, and investment drawn by social and business-friendly reforms. This has boosted central bank foreign reserves and surplus domestic liquidity. Bank balance sheets have strengthened further, with capital buffers well above regulatory minima, and credit has continued to grow despite policy interest rate hikes. The outlook is subject to uncertainty and external risks, but large sovereign buffers help mitigate vulnerabilities. Intensification of geopolitical tensions and geoeconomics fragmentation, or an abrupt global slowdown, sharp correction in global asset prices, or commodity price volatility could lead to a reduction in the flow of goods, capital, and tourism.