The United Arab Emirates economy is expected to see a faster pace of growth in the coming years, according to the annual report released by the Central Bank of UAE. The report suggests that this growth will come from improved performance in both the oil and non-oil sectors. The country's GDP grew by 7.6 percent in 2021, nearly double the rate from the previous year, making it one of the fastest-growing economies in the world. However, the growth rate is expected to slow down to 3.9 percent this year before picking up again in 2023, with the GDP forecasted to expand to 4.3 percent.
The report highlights that the real oil GDP is estimated to increase by 3 % and 3.5 % in 2023 and 2024. However, the forecast may be influenced by factors such as the Russia-Ukraine conflict, the risk of global slowdown, and further cuts in OPEC+ oil production.
The non-oil sector has also seen an acceleration in growth, which is projected to continue. Non-oil GDP growth increased to 6.6 % in 2022 from 5.8 % in 2021 due to various factors such as the lifting of Covid-19-related restrictions, getting back in global travel and tourism, real estate and construction sectors, and increased manufacturing activity. The report projects that the real non-oil GDP growth will slow down to 4.2 percent in 2023 and accelerate to 4.6 percent in 2024, which is coordinated with global growth trends.
The report also reveals that most quick support measures which are aimed at helping the country cope with the pandemic have been terminated. This reflects the banking system's return to pre-pandemic financial strength. His Highness Sheikh Mansour bin Zayed Al Nahyan, Vice-President, Deputy Prime Minister, Minister of Presidential Affairs of the UAE, and Chairman of the Board of Directors of the Central Bank, said that the Central Bank has played its role as the macro-prudential authority for the UAE.
In the initial 9 months of 2022, the UAE posted a surplus of Dh169.6 billion ($46.19 billion), a 165 percent increase from the same period in 2021. Revenues rose by 35.6 percent from January to September 2022 to Dh453.7 billion due to strong oil and non-oil growth and favorable oil prices. Total spending was up 5 % -on-year to Dh248.1 billion in the nine-month period, while capital spending fell close to 20 percent to Dh10.9 billion. Current spending rose by 6.3 percent to Dh273.1 billion, except for subsidies.
Overall, the Central Bank's annual report paints a promising picture for the UAE economy, with the growth expected to continue in the coming years. The report's projections suggest that the country's economy is poised to remain one of the fastest-growing economies in the world, which bodes well for investors and businesses operating in the region.
(With inputs from Reuters)