UAE’s Economic Growth Projected To Stay Strong At 4% In 2025, IMF Reports

by THEFUTURE.TEAM

January 24, 2025

The International Monetary Fund (IMF) has forecast that the UAE will continue to experience robust economic growth, estimating a steady 4% growth in 2025 despite a dip in oil production.

Non-Oil Sector Driving Growth

The IMF highlights that the UAE’s non-hydrocarbon sectors, notably tourism, construction, public spending, and financial services, are propelling this growth. These industries are expected to remain key contributors to the country’s economic momentum in the near future.

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Following a recent staff visit to the UAE, the IMF issued a statement discussing the country’s economic outlook, financial developments, and policy priorities. The UAE’s non-oil sector showed impressive performance, as evidenced by a notable rise in the S&P Global UAE Purchasing Managers’ Index (PMI), which hit a nine-month high of 55.4 in December, up from 54.2 in November.

Oil Sector And Inflation Outlook

Despite challenges in oil production, the IMF predicts a 2% growth in the oil sector, influenced by OPEC+ production cuts and the UAE’s cautious approach to increasing its OPEC+ production quota.

Inflation in the UAE is expected to remain manageable at around 2% in 2025, even with rising costs in housing and utilities. The IMF anticipates that capital inflows will continue to be strong, fueled by the country’s pro-business reforms, which should keep demand for real estate high and support price growth across various property segments.

Fiscal And Current Account Surpluses

The IMF projects a slight easing of the UAE’s fiscal surplus, predicting it will decrease to 4% of GDP in 2025, down from an estimated 5% last year. The current account surplus, however, is forecast to remain strong at about 7.5% of GDP. With international reserves still solid, the UAE is well-positioned to cover more than eight and a half months’ worth of imports.

Revenue Outlook

Despite the ongoing volatility in global oil prices, the IMF expects a decline in hydrocarbon revenue, alongside steady growth in non-oil revenues. The country’s implementation of a corporate income tax is expected to provide a consistent revenue stream in the coming years.

In its report, the IMF commended the UAE’s reform initiatives, noting that they play a crucial role in ensuring sustainable medium-term growth while also facilitating the country’s energy transition. The IMF emphasized the importance of a well-planned and sequenced approach to ensure the success of these reforms.

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Navigating Persistent Pressures: Labour Shortages, Bureaucracy, And Payment Delays In Limassol

by THEFUTURE.TEAM

December 19, 2025

Labour Shortages Challenge Expansion

Recent data from the Limassol Chamber Of Commerce And Industry underscores the enduring pressure within Limassol’s business community. Rather than indicating a sudden economic downturn, the survey reveals a gradual intensification of challenges that have long been a concern for local enterprises.

Skilled Labour In Short Supply

At the forefront is a chronic shortage of skilled labour, which accounts for 22.5% of the responses. Companies across a diverse range of sectors—from engineering and technical services to professional driving and specialized sales—are grappling with vacancies that remain open for extended periods. The persistent demand for critical skills forces many firms to overextend their existing workforce or postpone strategic projects. While recruiting talent from abroad is increasingly seen as a necessity, the process is often hampered by procedural delays, strict regulatory constraints, and rising employment costs.

Administrative Complexities And Public Sector Frustration

In addition to labour challenges, businesses express deep frustration with public-sector inefficiencies. Slow administrative procedures, fragmented communication, and a lack of clear guidance have rendered government support only marginally effective. With more than half of respondents regarding public services as minimally helpful, the inefficiencies highlight a system that frequently delays critical decisions and complicates routine business processes.

Deteriorating Payment Discipline

The survey also highlights a significant decline in payment discipline, with difficulties in collecting debts now ranking third among business concerns at 11.8%. Late payments are intensifying cash-flow pressures, extending through supply chains and further straining liquidity. Added to this is a sluggish justice system, where prolonged court delays have left companies financially exposed, often shouldering the burden of non-compliant customers while legal remedies lag behind.

Cost Pressures And Cautious Investment

Rising labour costs, intense domestic competition, and the pressure of lower-cost international markets — particularly in Asia — are driving firms to reconsider their investment priorities. Although nearly 60% of businesses intend to hire in the near term, investment plans in infrastructure, technology, and renewable energy are markedly selective. Overall sentiment remains cautious, with two-thirds of respondents expecting sales to stay level, both domestically and in overseas markets.

Calls For Policy Reforms And Digital Transformation

In an environment strained by excessive bureaucracy and inconsistent policy, businesses advocate for decisive governmental action. Respondents have pointed to the need for reduced business taxation, streamlined administrative processes, and more responsive public services. Furthermore, investment in digital transformation, artificial intelligence tools, and enhanced collaboration with academic and research institutions are seen as critical to boosting competitiveness and fostering innovation.

Conclusion: A Need For Strategic Reforms

The autumn 2025 barometer paints a picture of a resilient business community operating under increasing strain. With entrenched labour shortages, administrative inefficiencies, and deteriorating payment discipline, there is a clear call for targeted reforms. Addressing these structural challenges will be essential for ensuring that Limassol’s businesses not only sustain their current operations but also position themselves for future growth in an increasingly competitive global landscape.

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