Increased UAE government spending enhances economic growth opportunities in 2025

The increase in federal government spending in the UAE contributes to the continued economic growth of the country during 2025, while strategic policies and government initiatives consolidate this growth and economic diversification, and attract foreign investments, as the UAE government approved a federal budget for 2025 with an increase of about 12% in spending, to reach 71.5 billion. dirhams, with about 40% allocated to social development and pensions, including education and health care.

During the 2025 budget, Abu Dhabi is expected to continue increasing annual spending on non-oil sectors, which include renewable energy projects, infrastructure and industry, as well as various service sectors, which will contribute to attracting foreign investments, as Fitch previously expected spending to range The government budget for the Emirate of Abu Dhabi for the year 2024 is between 260 and 300 billion dirhams, and that the emirate will achieve a financial surplus of 5.4% of the gross domestic product. 2024.

Dubai announced an expansionary budget for the years 2025-2027, with a total expenditure of 272 billion dirhams, with a large percentage allocated to infrastructure projects, while the Emirate of Sharjah adopted the largest general budget in its history with total expenditures amounting to about 42 billion dirhams, and the Ajman government also approved the general budget for the year. 2025, with a value of 3.7 billion dirhams.

The Interregional Center for Strategic Analyzes, based in Abu Dhabi, confirmed that the UAE budgets for 2025 aim to support economic growth through several main axes, including increasing government spending on infrastructure projects, stimulating non-oil sectors, enhancing social services, and spending on technology and industry. And clean energy, which reduces dependence on the oil resource and enhances the sustainability of growth. It also works to achieve a financial surplus that contributes to macroeconomic stability and enhances confidence in the business environment.

According to reports from the International Monetary Fund and the World Bank, the UAE is expected to achieve an economic growth rate of between 4 and 6% during 2025, thanks to expansionary policies in its budgets. International financial institutions agree on these positive expectations, as the International Monetary Fund raised its forecast for real GDP growth in the UAE in 2025 to 5.1%, while the Arab Monetary Fund expects growth of 6.2% for the same year.

“Interregional” indicated that these expectations are based on several factors, most notably the UAE’s endeavor to strengthen non-oil sectors, such as tourism, transportation, financial services, insurance, construction, and real estate, which contributes to achieving sustainable growth and expanding the network of economic partnerships to increase trade exchange and attract investments, which It enhances economic growth opportunities and focuses on developing advanced technology and artificial intelligence sectors, which contributes to enhancing productivity and stimulating economic growth.

The most prominent growth factors for the UAE economy during 2025 include political stability and a stimulating legislative environment, with continued supportive economic policies to attract investors and entrepreneurs from around the world, and strengthening the financial sector through advanced banking services, in addition to supporting Islamic finance and financial markets.

He explained that expectations indicate that the UAE economy will witness remarkable growth in non-oil sectors during the year 2025, and the most prominent of these sectors is tourism and hospitality, as it is expected that the tourism and hospitality sector will continue to achieve strong growth, supported by global events and advanced infrastructure, as the sector’s contribution reaches… The economy currently amounts to about 13% of the gross domestic product.

The trade sector is at the forefront of sectors expected to achieve significant growth rates during 2025, with the UAE seeking to expand its foreign trade to 25.6 trillion dirhams by 2033, which indicates continued growth in this sector.