ABU DHABI, Sept 18 (Reuters) - The United Arab Emirates' economy is expected to grow 4.9% in 2025, up from an earlier forecast of 4.4%, due to higher oil production and strong growth in the non-hydrocarbon sector, the central bank said.
The hydrocarbon sector is expected to grow by 5.8% in 2025, and expand by 6.5% next year, the bank said in a quarterly update, on increased oil production in line with OPEC+ quotas.
"This real adjustment in hydrocarbon output is expected to largely offset the negative impact of the decline in oil prices on government revenues, creating a positive ripple effect on non-hydrocarbon sectors," the report said.
The UAE, a top oil exporter, has accelerated plans to diversify its economy, with the non-hydrocarbon sector accounting for 77.1% of total GDP in the first quarter.
Non-hydrocarbon GDP is expected to grow by 4.5% in 2025 and 4.8% in 2026, the central bank projected, benefiting potentially from the indirect effects of higher hydrocarbon growth, including more investment, government spending and confidence in the economy.
The UAE economy grew 3.9% year-on-year in the first quarter, driven by non-hydrocarbon growth of 5.3%, led by the manufacturing, financial services, construction and real estate sectors.
Reporting by Rachna Uppal; Editing by Andrew Cawthorne
Source: Reuters