The UAE economy expanded by 8.4 per cent in the first quarter of this year, exceeding initial estimates, as higher oil prices and successful Covid-19 mitigation measures set it up for fastest annual growth since 2011.
The pace of gross domestic product growth in the first quarter — significantly sharper than the 2.1 per cent pre-pandemic GDP level — was above a previous 8.2 per cent estimate by the Central Bank of UAE. This came as the economy rebounded strongly on the back of tourism, a buoyant property sector and higher oil prices.
The Arab world’s second-largest economy was “the fastest in overcoming the effects of the largest pandemic” and it was “the most balanced between human health and economic interests”, Sheikh Mohammed bin Rashid, Prime Minister and Ruler of Dubai, said in a tweet on Sunday after the UAE Cabinet meeting in Abu Dhabi.
The Cabinet also reviewed the UAE's other competitive and economic development indicators that underpinned its accelerated growth.
The number of development indicators in which the UAE achieved a top global ranking rose to 156 compared with 121 before the pandemic. Meanwhile, the tally rose to 288 for top-five rankings for the country from 189 for the same period, Sheikh Mohammed said.
The UAE’s foreign trade for the first six months of this year exceeded Dh1 trillion ($272 billion), compared with Dh840bn for the same period before the pandemic.
The tourism sector’s revenue exceeded Dh19bn during the first half of this year and total hotel guests in the same period reached 12 million. Growth in the number of hotel guests climbed by 42 per cent, compared with the same period before the pandemic.
“Our indicators today are stronger than our indicators before the pandemic, and our economic growth is faster than before the pandemic, and our tourism, commercial and development sectors are larger than before the pandemic,” Sheikh Mohammed said on Twitter.
While countries in the East and West are still “suffering from the effects of the pandemic”, and global trade has yet to regain its strength, “the UAE has become a model and a global exception in the speed and strength of growth after the pandemic”, he added.
The UAE’s GDP growth in the January to March quarter was driven by a sharp increase in oil production, as well as a noticeable improvement in the real non-oil GDP, the UAE Central Bank said in its Quarterly Economic Review in July.
The economy, which expanded by 3.8 per cent in 2021, is expected to grow by 5.4 per cent and 4.2 per cent in 2022 and 2023, respectively, according to the CBUAE data.
Emirates NBD forecasts the UAE economy will grow by 5.7 per cent and Abu Dhabi Commercial Bank expects a 6 per cent expansion, supported by a sharp rise in the oil sector, while the International Monetary Fund projects 4.2 per cent this year.
An expansion of 6 per cent would be the highest since 2011, when the economy grew by 6.9 per cent.
There is a higher probability of stronger growth, the Central Bank said, as a result of oil output, higher prices and government initiatives to double the size of the manufacturing sector by 2031.
Oil prices surged to nearly $140 per barrel after Russia’s military offensive in Ukraine started in February. They have come down from their highs and are up about 18 per cent since the start of this year.
The UAE's oil production in the first quarter averaged 2.95 million barrels per day, while the country's hydrocarbon GDP is estimated to have grown by 13 per cent a year, July data from the Central Bank showed.
“Depending on the developments in global economic activity, recessionary expectations and geopolitical tensions, there may be space for increased oil supply to balance the markets and stimulate global growth,” the Central Bank said at the time.
The UAE's non-oil sector has also grown, expanding by more than 6 per cent in the first three months of the year. This was largely due to containment of Covid-19, the easing of pandemic-related restrictions, the Expo 2020 Dubai and the recovery in global travel, the Central Bank said.
For 2022 and 2023 as a whole, the Central Bank expects non-oil GDP to expand by 4.3 per cent and 3.9 per cent, respectively.
The UAE's average purchasing managers’ index has also consistently remained in expansionary territory above the 50 neutral mark this year.
Business activity in UAE’s non-oil private sector economy improved at the quickest rate since June 2019. Employment in the Emirates rose for the fourth straight month as the UAE PMI Index climbed to 56.7 in August from 55.4 in July.
The specs
Engine: 6.2-litre V8
Power: 502hp at 7,600rpm
Torque: 637Nm at 5,150rpm
Transmission: 8-speed dual-clutch auto
Price: from Dh317,671
On sale: now
Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
Round 3: February 7-9, Dubai Autodrome – Dubai
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
How to protect yourself when air quality drops
Install an air filter in your home.
Close your windows and turn on the AC.
Shower or bath after being outside.
Wear a face mask.
Stay indoors when conditions are particularly poor.
If driving, turn your engine off when stationary.
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Quick pearls of wisdom
Focus on gratitude: And do so deeply, he says. “Think of one to three things a day that you’re grateful for. It needs to be specific, too, don’t just say ‘air.’ Really think about it. If you’re grateful for, say, what your parents have done for you, that will motivate you to do more for the world.”
Know how to fight: Shetty married his wife, Radhi, three years ago (he met her in a meditation class before he went off and became a monk). He says they’ve had to learn to respect each other’s “fighting styles” – he’s a talk it-out-immediately person, while she needs space to think. “When you’re having an argument, remember, it’s not you against each other. It’s both of you against the problem. When you win, they lose. If you’re on a team you have to win together.”
Top 10 in the F1 drivers' standings
1. Sebastian Vettel, Ferrari 202 points
2. Lewis Hamilton, Mercedes-GP 188
3. Valtteri Bottas, Mercedes-GP 169
4. Daniel Ricciardo, Red Bull Racing 117
5. Kimi Raikkonen, Ferrari 116
6. Max Verstappen, Red Bull Racing 67
7. Sergio Perez, Force India 56
8. Esteban Ocon, Force India 45
9. Carlos Sainz Jr, Toro Rosso 35
10. Nico Hulkenberg, Renault 26
GOLF’S RAHMBO
- 5 wins in 22 months as pro
- Three wins in past 10 starts
- 45 pro starts worldwide: 5 wins, 17 top 5s
- Ranked 551th in world on debut, now No 4 (was No 2 earlier this year)
- 5th player in last 30 years to win 3 European Tour and 2 PGA Tour titles before age 24 (Woods, Garcia, McIlroy, Spieth)
Armies of Sand
By Kenneth Pollack (Oxford University Press)
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Most sought after workplace benefits in the UAE
- Flexible work arrangements
- Pension support
- Mental well-being assistance
- Insurance coverage for optical, dental, alternative medicine, cancer screening
- Financial well-being incentives
Islamophobia definition
A widely accepted definition was made by the All Party Parliamentary Group on British Muslims in 2019: “Islamophobia is rooted in racism and is a type of racism that targets expressions of Muslimness or perceived Muslimness.” It further defines it as “inciting hatred or violence against Muslims”.
EA Sports FC 24
Madrid Open schedule
Men's semi-finals
Novak Djokovic (1) v Dominic Thiem (5) from 6pm
Stefanos Tsitsipas (8) v Rafael Nadal (2) from 11pm
Women's final
Simona Halep (3) v Kiki Bertens (7) from 8.30pm
Nayanthara: Beyond The Fairy Tale
Starring: Nayanthara, Vignesh Shivan, Radhika Sarathkumar, Nagarjuna Akkineni
Director: Amith Krishnan
Rating: 3.5/5
MATCH INFO
Quarter-finals
Saturday (all times UAE)
England v Australia, 11.15am
New Zealand v Ireland, 2.15pm
Sunday
Wales v France, 11.15am
Japan v South Africa, 2.15pm
