Sanele Mjikane
Dubai’s GDP grew by 3.1% in the first nine months of 2024, driven by critical sectors such as transport, information & communication, and financial activities. This reflects the emirate’s commitment to key development areas outlined in its D33 agenda, including technology adoption and transport expansion. The agenda aligns with the national strategy to strengthen the non-oil sector, particularly in real estate and finance. UAE non-oil growth is expected to remain strong in 2025 at 4.8%.
We expect the Spanish and Portuguese economies will continue to be clear outperformers within a struggling eurozone this year. Spain and Portugal have also reduced their long-standing, macro-financial vulnerabilities. An improved demographic outlook also means we are more optimistic about Spain and Portugal’s long-term growth than other peripheral economies.
After several years of rapid growth, we think Denmark’s pharmaceutical sector has reached an inflection point and production will settle at a new permanent high. But US President Donald Trump’s threat to impose high tariffs on Danish goods over the status of Greenland means the pharma sector is entering a more uncertain and protectionist era.
Potential US tariffs would be disruptive for the eurozone economy as a whole, but we think their inflationary impact is likely to be contained. As US imports account for around 10% of total extra-EU imports, we estimate a 10% across-the-board tariff would only increase the producers prices index by 0.5%.
Surveys are a staple of high-frequency economic indicators, but they have become less reliable in predicting hard economic data like GDP growth. This feeds macro volatility – markets still interpret surveys such as PMIs essentially as reliable growth signals. The disconnect between survey and hard data can lead to mispricing.
The EU VAT Gap 2024 report offers an extensive analysis of the value-added tax (VAT) compliance and policy gaps across the EU. As part of a larger consortium, Oxford Economics analysed the discrepancy between the theoretical VAT Total Tax Liability (VTTL) and actual revenue collected, providing insights into compliance inefficiencies and policy-induced revenue losses.