UAE economy grew 7.9% in 2022 amid diversification strategy

The country's GDP reached $442bn at constant prices last year, as non-oil sector boosted growth

The Dubai skyline at dusk. The UAE is focusing on boosting non-oil sectors to support economic growth. AFP

The UAE's gross domestic product reached Dh1.62 trillion ($442 billion) at constant prices in 2022, achieving 7.9 per cent annual growth, supported by its non-oil sector as the country continues with its economic diversification strategy.

GDP stood at Dh1.86 trillion at current prices, representing annual growth of 22.1 per cent, state news agency Wam reported on Sunday, citing preliminary estimates from the Federal Competitiveness and Statistics Centre.

The UAE government is working to “build an innovative economic model that serves its future vision by adopting flexible economic policies that rely on speed and accuracy in responding to global changes, adopting stimulating economic strategies, and forward-looking economic plans based on economic diversification, and improving economic procedures and legislation”, said Abdulla bin Touq, Minister of Economy.

“This maintains the country's position as an environment that attracts investments on an ongoing basis, and promotes foreign trade and openness as one of the components of international economic relations,” he said.

“The success and integration of these policies also enhances the requirements of sustainable development, achieving economic prosperity and a decent life for all citizens and residents of the country, and contributes to the UAE's leadership and competitiveness at the regional and international levels.”

The UAE's economy has 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, despite global economic challenges such as volatile commodity prices, inflation, uncertainty with regards to monetary policies, as well as supply chain disruptions, Mr bin Touq said in March.

Measures 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 to enhance the country's position as a permanent centre for creativity and innovation.

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.

Economic initiatives related to non-oil sectors and activities “contributed positively” to enhancing the growth of the UAE's GDP last year, the Wam report said.

Non-oil GDP at constant prices reached Dh1.174 trillion, with “positive growth in all vital sectors”.

Last week, the UAE Central Bank also revised its forecast for the country's non-oil economic growth for 2023 to 4.5 per cent, from 4.2 per cent in March, amid a surge in its travel and tourism industry.

After expanding by 7.2 per cent in 2022, the non-oil sector is estimated to have grown at slightly lower pace in the first quarter of this year, the banking regulator said in its Quarterly Economic Review.

But with travel and tourism set to further accelerate during the remainder of the year, as well as growth in the property sector and a boost in foreign direct investment, the non-oil sector is expected to record strong momentum.

For 2023, as a whole, the Central Bank downgraded the Emirates' growth by 0.6 percentage points to 3.3 per cent, reflecting oil production cuts agreed among Opec+ members.

Looking ahead, the UAE aims to double the size of its economy to Dh3 trillion by 2031, with a focus on boosting non-oil exports and the tourism sector.

“The UAE's GDP per capita has grown during the past six years by an unprecedented rate of 24.7 per cent despite the annual increase in the population, while the 2022 GDP per capita grew by 21.1 per cent compared to 2021, which reaffirms the success of the economic policies pursued by the government in achieving prosperity and advancing the quality of life in the UAE society,” said Hanan Ahli, director of the FCSC.