United Arab Emirates' Economy Predicted to Expand by 4.3% in 2024, According to Central Bank Statement
UAE's Economic Outlook: Steadily Soaring Above Headwinds
The UAE Reserve Bank has kept its thumb on the pulse of the nation's financial growth, projecting a 3.9% expansion for the current year and a whopping 4.3% surge for 2024.
Last month, Wam reported the financial regulator's forecast, indicating the non-oil economy will expand by an impressive 4.6% and oil GDP by 3.5% in 2024. For 2023, non-oil GDP is expected to grow at 4.2%, while oil GDP will firm up by 3%.
The UAE's economy has been cruising through the past eleven years, with an approximate 7.6% growth in 2015, which, according to the Central Bank, marked the highest increase since 2004. If you travel back to 2021, the expansion had slowed down slightly to a more modest 3.9%.
Delving deeper into the numbers, non-oil GDP and oil output reportedly expanded by 6.6% and 10.1% respectively in 2015, attributed by the Central Bank to the construction, manufacturing, and production sectors.
Events like the Qatar World Cup and others held in the region boosted the UAE's tourism industry. This dynamism in the sector serves as a testament to the country's resilience and its strategic position to capitalize on major events.
In the private sector, the banking industry remains a vital backbone, as credit to the economic sector increased by 4.9% annually during the last quarter of 2022. The UAE's non-oil foreign trade, meanwhile, hit a record Dh2.23 trillion ($607.1 billion) in 2022, with an impressive 17% surge from the same period in 2021.
Recent economic events have further established the UAE as a global hub for attracting foreign investments and top talent. FDI inflows have been significantly boosted by implementing various reforms, and the financial sector continues to play a crucial role in bolstering investment in the industry.
The UAE's non-oil economy is projected to grow by 4.2% by the end of 2023, brushing off international headwinds and maintaining stability. As the economy barreled its way past the coronavirus pandemic, overall government revenue rose by approximately 7% in the fourth quarter of 2022, reaching Dh148.1 billion.
Service activity in the non-oil sector economy soared at its fastest pace in four months in February, reaching 54.3 on the S&P Global purchasing managers' index (PMI) in February. The Dubai property market witnessed unprecedented activity, with the overall worth of transactions hitting Dh214 billion in Q4, an annual boost of 169%.
The number of tourists flocking to the emirate swelled to 14.4 million in 2022, nearly double the total number of visitors in 2021. Dubai's hotel occupancy ratio climbed to 73% in 2022, compared to 67% in 2021, while Abu Dhabi's occupancy ratio rose to 70%. Passenger traffic via the five Abu Dhabi airports tripled to 15.9 million travelers in 2022, jumping from 5.3 million guests in 2021. Meanwhile, Dubai airports welcomed 21.8 million passengers in 2022, marking an 81% increase over 2021.
Last Updated: 28 March 2023
Insights:
- Despite international headwinds, the UAE's non-oil economy is expected to grow 4.2% by the end of 2023.
- The construction, manufacturing, and production sectors contribute significantly to UAE's non-oil GDP growth.
- Events like the Qatar World Cup have had a positive impact on the UAE's tourism industry.
- Foreign direct investment inflows in the UAE have been boosted by various reforms and strategies aimed at enhancing FDI and attracting top talent.
- The banking industry plays a crucial role in supporting investment in the economy, with credit to the economic sector increasing by 4.9% annually.
- The UAE's non-oil foreign trade surged by 17% in 2022, hitting a record high of Dh2.23 trillion ($607.1 billion).
- The growth in the UAE's non-oil economy, projected at 4.2% by the end of 2023, indicates a resilience that transcends international headwinds in the finance sector.
- The private sector, particularly the banking industry, is a critical support system for investment, with annual credit to the economic sector increasing by 4.9% as of the last quarter of 2022.
- The UAE's non-oil foreign trade soared in 2022, marking a 17% surge and hitting an unprecedented Dh2.23 trillion ($607.1 billion), underscoring its strong position in global business and finance.
