UAE Central Bank Raises 2024 Economy's Growth Forecast to 5.7%

The Central Bank of the UAE (CBUAE)  - AAWSAT
The Central Bank of the UAE (CBUAE) - AAWSAT
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UAE Central Bank Raises 2024 Economy's Growth Forecast to 5.7%

The Central Bank of the UAE (CBUAE)  - AAWSAT
The Central Bank of the UAE (CBUAE) - AAWSAT

The Central Bank of the UAE (CBUAE) has raised its forecast for the Gross Domestic Product (GDP) growth for the UAE in the coming year, 2024, to 5.7 percent, compared to its previous projection of 4.3 percent, WAM reported.

The bank stated in a recently released report that the overall GDP for the country is expected to grow by 3.1 percent in the current year, 2023.

The report anticipates a non-oil GDP growth of 5.9 percent in 2023 and 4.7 percent in the following year, while estimating the oil GDP growth at 8.1 percent in 2024.

The Central Bank clarified that the UAE economy recorded a 3.8 percent year-on-year (YoY) growth in the second quarter of the current year, compared to 8 percent recorded in the same period last year, aligning similarly with the first quarter of the current year.

It mentioned that the non-oil GDP growth accelerated to 7.3 percent YoY in the second quarter of the current year, up from 4.5 percent YoY in the previous quarter and 6.4 percent YoY compared to the same period last year.

According to the report, government revenues reached AED 246.9 billion, constituting 26.4 percent of the GDP on an annual basis during the first half of 2023. Meanwhile, total expenditures amounted to AED 199.5 billion, accounting for 21.3 percent of the GDP on an annual basis.

According to WAM, the Central Bank's report highlighted the continued robustness of non-oil private sector economic activity. The Purchasing Managers' Index (PMI) for the UAE surged to 57.7 in October, marking its highest level since June 2019. The improvement in working conditions was propelled by a sharp rise in both business activity and new orders, particularly in new export orders, growing at the fastest pace in over four years.

The report also indicated that the PMI data generally signalled strong growth in the non-oil sector in the third quarter and in October. Companies remained optimistic about expectations over the next twelve months.



UK Borrowing Overshoot Underscores Task for New Government

Larry the Cat sits on Downing Street in London, Britain July 19, 2024. REUTERS/Toby Melville
Larry the Cat sits on Downing Street in London, Britain July 19, 2024. REUTERS/Toby Melville
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UK Borrowing Overshoot Underscores Task for New Government

Larry the Cat sits on Downing Street in London, Britain July 19, 2024. REUTERS/Toby Melville
Larry the Cat sits on Downing Street in London, Britain July 19, 2024. REUTERS/Toby Melville

Britain's government borrowed a lot more than forecast in June, according to official data published on Friday that highlighted the big budget challenges facing the new government of Prime Minister Keir Starmer.
Public sector net borrowing, excluding state-controlled banks, was a larger-than-expected 14.5 billion pounds ($18.75 billion) last month. A Reuters poll of economists had pointed to an increase of 11.5 billion pounds.
Dennis Tatarkov, Senior Economist at KPMG UK, said the data showed "the daunting task" for the new government to fund its agenda without worsening the public finances.
"A combination of high levels of spending and weak growth prospects will present uncomfortable choices – deciding between even more borrowing or substantially raising taxes if spending levels are to be maintained," he said.
New finance minister Rachel Reeves is likely to announce her first budget after parliament's summer recess. She and Starmer have ruled out increases in the rates of income tax, corporation tax and value-added tax, leaving her little room for maneuver to improve public services and boost investment.
Reeves has ordered an immediate review of the new government's "spending inheritance", a move that lawmakers from the opposition Conservative Party say could presage increases in taxes on capital gains or inheritances.
"Today's figures are a clear reminder that this government has inherited the worst economic circumstances since the Second World War, but we’re wasting no time to fix it," Darren Jones, a deputy Treasury minister, said after the data was published.
Starmer's government says it will speed up Britain's slow-moving economy - and generate more tax revenues - via a combination of pro-growth reforms and a return to political stability that will attract investment.
The borrowing figure for June was 2.9 billion pounds higher than expected by Britain's budget watchdog whose forecasts underpin government tax and spending plans.
In the first three months of the financial year which began in April, borrowing was 3.2 billion pounds higher than projected by the Office for Budget Responsibility at 49.8 billion pounds.
The Office for National Statistics said June's borrowing was the lowest for the month since 2019, helped by a big drop in spending on interest paid on bonds linked to inflation which has slowed sharply.
But the deficit was made bigger by a 1.2 billion-pound fall in social security contributions compared with June 2023. They were cut by former Prime Minister Rishi Sunak before the July 4 election that swept Starmer's Labour Party to power.