The United Arab Emirates has achieved a significant economic milestone, marking “a historic first” in its diversification efforts. The country’s non-oil sector now accounts for an impressive 73 percent of its total Gross Domestic Product (GDP), reflecting strong investor confidence in the UAE’s investment environment.
Abdullah bin Touq Al Marri, the UAE’s Minister of Economy, shared this achievement during the third annual conference of Investopia. He emphasized the private sector’s central role in the nation’s evolving economic landscape, highlighting over 16 sustainable sectors, including health technology, agriculture, and artificial intelligence, contributing to the robustness of the UAE’s economy.
Investopia, a global investment platform initiated by the UAE government in September 2021, hosted its two-day event in Abu Dhabi, focusing on ‘Emerging Economic Frontiers: Investing in the New Economy Growth Sectors.’
Al Marri projected the UAE’s economy to grow by up to 5.0 percent in 2024. This forecast, while optimistic, is slightly more conservative compared to the Central Bank of the UAE (CBUAE), which raised its 2024 growth projection for the UAE to 5.7 percent, an increase from its earlier 4.3 percent estimate. The CBUAE anticipates non-oil GDP growth of 5.9 percent in 2023 and 4.7 percent in 2024, with oil GDP growth projected at 8.1 percent for the latter year.
International forecasts align with these positive projections. The International Monetary Fund and the World Bank estimate a 3.4 percent GDP increase for the UAE in 2023 and four percent in 2024. Furthermore, the UAE’s current account balance is expected to be at 8.2 percent of the GDP in 2023 and 7.7 percent in 2024.
Standard & Poor’s Global Ratings projects the UAE’s GDP to expand by over five percent in 2024, outpacing the global economy’s expected 2.8 percent growth. Tatiana Leskova, an associate director at S&P Global Ratings, highlighted the strong momentum in sectors like hospitality, wholesale and retail, and financial services in Dubai, driving growth for 2024-2025.
Swiss Re Group forecasts a rise in the UAE’s real GDP growth to 4.2 percent this year, spurred by construction activity, tourism, and government investments in infrastructure and green energy. The group noted a slowdown in real GDP growth to 2.8 percent in 2023 due to oil production cuts. However, the real estate sector experienced robust growth in 2023, with a record high in residential transactions.
The UAE’s economic strides, particularly in diversifying its economy away from oil reliance, position it as a resilient and dynamic global economic player, ready to navigate future challenges and opportunities.
