The UAE is set to be the fastest growing economy in the Arabian Gulf next year, according to the International Monetary Fund (IMF).

The latest findings from the IMF show the UAE economy will grow 4.2% in 2023, surpassing Oman with 4.1%, Saudi Arabia at 3.7%, Bahrain with 3%, Kuwait at 2.6% and Qatar with 2.4% projected growth.

This year, the IMF forecasts Kuwait will have the Gulf’s fastest growing economy with 8.7% growth, followed by Saudi Arabia at 7.6%, with the UAE economy predicted to grow 5.1%.

“The global economy is experiencing a number of turbulent challenges. Inflation higher than seen in several decades, tightening financial conditions in most regions, Russia’s invasion of Ukraine, and the lingering Covid-19 pandemic all weigh heavily on the outlook,” according to the IMF’s World Economic Outlook Report October 2022.

“The global economy’s future health rests critically on the successful calibration of monetary policy, the course of the war in Ukraine, and the possibility of further pandemic-related supply-side disruptions, for example, in China.”

On a global scale, the IMF forecasts an economic growth slowdown, with the world economy growing 3.2% this year, down from 2021’s 6% growth, and then a further slowdown to 2.7% in 2023, Arabian Business reports.

“This is the weakest growth profile since 2001 except for the global financial crisis and the acute phase of the Covid-19 pandemic and reflects significant slowdowns for the largest economies,” the IMF added.

Overall, the IMF stated that economic outlook risks “remain unusually large and to the downside,” and called for monetary policy to remain on track to safeguard price stability on the way to returning to global growth.

“Front-loaded and aggressive monetary tightening is critical to avoid inflation de-anchoring as a result of households and businesses basing their wage and price expectations on their recent inflation experience,” the IMF stated.