The UAE’s growth has been projected to jump to 6.7% in 2025, up from 3.8% this year, thanks to its efforts to diversify the economy and robust trade with neighbours.

John Ashbourne, Global Economist, Emerging Markets, BMI, said the research firm was “quite optimistic” about the UAE, which will stand out as one of the faster-growing economies in its region in 2025. 

The country has a big tourism sector, a very diversified economy and has benefitted from trade with Iran and other neighbouring countries, Ashbourne said at the firm’s Emerging Markets Key Themes 2024 webinar.

Oil prices are expected to remain at around $82-$84 per barrel on average during 2024 and 2025, he said.  

Oil demand in developed markets will probably peak in 2025 or 2026 and begin falling slowly, while across the world it will probably start falling around 2034 or 2035, he said. High rates of EV adoption in China may mean the oil demand peak will arrive there sooner, in the late 2020s or early 2030s.

Chinese growth ‘not coming back’

Moving China back to pre-pandemic growth levels would be “incredibly difficult”, requiring significant fiscal stimulus, which is not desirable given China’s debt situation, or an economic boom caused by a new sector bursting onto the scene, Ashbourne said.

“In the past two years, China has gone from being a net car importer to being the world’s largest exporter.

Car production has more than doubled in a few years,” he said, adding: “If developing the world’s biggest EV sector wasn’t enough to boost growth by 6% to 7%, I really struggle to know what would be. 

“I am confident that growth will not be returning back to the numbers we were expecting to see [prior to the pandemic].”

BMI estimates showed that Chinese growth will fall to just under 3% by 2033, whereas prior to the pandemic, it had been close to 4.5%. 

(Reporting by Imogen Lillywhite; editing by Seban Scaria)