UAE could achieve 7% economic growth this year, minister says

Arab world’s second-largest economy estimated to have grown by 7.6 per cent in 2022

Abdullah bin Touq, Minister of Economy, speaks at the Global Summit of Women in Dubai. Photo: Global Summit of Women 2023

The UAE’s economy could grow by 7 per cent again this year as the country seeks to double the size of its economy by 2031, the Minister of Economy has said.

Last year, the Arab world’s second-largest economy is estimated to have grown by 7.6 per cent, marking its highest expansion in 11 years, after gross domestic product rose 3.9 per cent in 2021, according to the UAE Central Bank.

“It is a tough target [and] we did it the first year. This year, we want to do another 7 per cent and keep doing it every single year,” Abdullah bin Touq said on Thursday during a speech at the Global Summit of Women in Dubai.

The UAE's economy recovered sharply from the Covid-19-induced slowdown on the back of higher oil prices and measures to mitigate the impact of the pandemic.

The government has adopted an array of measures that have enhanced the resilience of its economy in the face of global economic challenges such as volatile commodity prices, inflation, uncertainty with regard to monetary policies, as well as supply chain disruptions, Mr bin Touq said in March.

These include the granting of 100 per cent foreign ownership, the issuance of legislation to protect intellectual property and the launch of a strategy to attract talent and skills in all sectors to enhance the country's position as a permanent centre for creativity and innovation.

Last year, foreign direct investment inflows to the country amounted to $171.6 billion.

There was also unprecedented growth in the country’s non-oil foreign trade as it crossed the Dh2.2 trillion mark for the first time, with an annual growth of 17 per cent.

The minister also said on Thursday that the coming federal corporate tax is “good” for the economy as it is levied on a company’s profit.

Last year, the UAE introduced corporate tax with a standard statutory rate of 9 per cent, which will come into effect for businesses whose financial year starts on or after June 1.

“It is one of the lowest tax percentage [globally] … and I think that's very attractive as well,” said Mr bin Touq.

“And, when you have a corporate tax system, you have more policy drivers.

“The UAE is not going to invent something new … [it is] something that is already based on international laws and that’s the way we are going to take because we want to grow 7 per cent.”

The minister also said that women-led start-ups and businesses would play an important role in driving the country’s economic growth.

The UAE government has passed laws and policies over the past 15 years to enhance women's contribution to society and the nation's sustainable economic development, reflecting their commitment to women's empowerment across economic, social and work spheres, Mr bin Touq said.

“As a result, today, women represent half of the country’s workforce and their representation in boardrooms went up from 4 per cent to 8.8 per cent in just a couple of years,” he said.

“Besides, the UAE has the highest share of women in parliament at 50 per cent and is also among those countries with the largest number of women ministers at 28 per cent.”