Abu Dhabi’s non-oil economy grew by 6.1 per cent annually in the first quarter of the year, with the sector's GDP reaching the highest level in nine years, on the back of the emirate's strong diversification push.
Robust non-oil growth supported Abu Dhabi's overall economy to expand by 3.9 per cent annually in the first three months of 2023, the Statistics Centre Abu Dhabi said on Monday.
The emirate's non-oil GDP at constant prices grew to Dh146 billion ($39.75 billion) during the period compared with Dh137.7 billion in the first quarter of 2022.
Total GDP reached Dh276.6 billion.
The contribution of non-oil activities to the overall GDP rose to its highest level in eight years at 52.8 per cent on the back of higher contributions from construction, wholesale and retail trade, transportation and storage, and financial and insurance services activities.
“Abu Dhabi is committed to strengthening its economic scene by achieving a strong, stable, smart and sustainable knowledge-economy,” Ahmed Al Zaabi, chairman of the Abu Dhabi Department of Economic Development, said.
“The non-oil activities have been experiencing strong growth rates of non-oil sectors … despite mounting challenges in the global landscape.”
Abu Dhabi has launched several initiatives as it aims to attract more investment into the emirate and diversify its economy away from oil.
Last year, the UAE capital launched a new industrial strategy to boost the contribution of the sector to the economy. As part of the strategy, it is investing Dh10 billion across six industrial programmes to more than double the size of the emirate’s manufacturing sector to Dh172 billion by 2031.
Abu Dhabi’s economy grew 9.3 per cent annually in 2022 to record the highest growth rate in the Mena region last year, with its GDP exceeding Dh1.1 trillion.
“Fostering Abu Dhabi’s resilient and diversified economy will continue to be the key focus for decades to come while developing human capital, attracting the best talent, investments, and economic partners,” Mr Al Zaabi said.
“Building upon the latest statistical data, Abu Dhabi is further opening its economy to the world, strengthening the emirate’s appeal as an ideal market for foreign investors, businesses, start-ups, and entrepreneurs from around the world.”
Construction activity continued the momentum after recording the highest quarterly growth rate in nine years in the fourth quarter of 2022. It grew 14.4 per cent annually in the January to March period, following a 14.5 per cent increase in the previous quarter, according to SCAD's latest data.
The sector contributed 8.5 per cent to Abu Dhabi’s economy during the three-month period as the real estate market continues to recover from the Covid-19 pandemic, drawing in local and international investors.
Accommodation and food services grew 14.5 per cent annually in the first quarter and the hotel occupancy rate exceeded 40 per cent during the period, highlighting “the successful implementation of the visions and strategic plans established by the emirate, aiming to attract over 24 million visitors in 2023”, SCAD said.
Abu Dhabi is focusing on boosting the tourism sector and plans to increase its economic contribution to 12 per cent by 2030, up from 5 per cent this year.
In April, it launched a new fund aimed at further growing its meetings, incentives, conventions and exhibitions industry.
Financial and insurance activities grew 11.5 per cent during the three-month period on the back of the banking sector's strong performance, with some lenders reporting net profit growth of more than 50 per cent during the quarter. The financial and insurance sector contributed 6.3 per cent to the emirate's GDP in the January to March period.
The transport and storage sector recorded annual growth of 13.6 per cent, with the quarterly added value approaching Dh5 billion amid the active movement of passengers and goods through land, air, and sea.
Wholesale and retail trade grew by 13.9 per cent to reach the highest quarterly level in the past nine years, contributing 6 per cent to Abu Dhabi's gross domestic product.
“This growth presents increased opportunities for attracting investments and capital,” Abdulla Alqemzi, acting director general of SCAD, said.
In numbers: China in Dubai
The number of Chinese people living in Dubai: An estimated 200,000
Number of Chinese people in International City: Almost 50,000
Daily visitors to Dragon Mart in 2018/19: 120,000
Daily visitors to Dragon Mart in 2010: 20,000
Percentage increase in visitors in eight years: 500 per cent
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The specs
Engine: four-litre V6 and 3.5-litre V6 twin-turbo
Transmission: six-speed and 10-speed
Power: 271 and 409 horsepower
Torque: 385 and 650Nm
Price: from Dh229,900 to Dh355,000
Who was Alfred Nobel?
The Nobel Prize was created by wealthy Swedish chemist and entrepreneur Alfred Nobel.
- In his will he dictated that the bulk of his estate should be used to fund "prizes to those who, during the preceding year, have conferred the greatest benefit to humankind".
- Nobel is best known as the inventor of dynamite, but also wrote poetry and drama and could speak Russian, French, English and German by the age of 17. The five original prize categories reflect the interests closest to his heart.
- Nobel died in 1896 but it took until 1901, following a legal battle over his will, before the first prizes were awarded.
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COMPANY PROFILE
Company name: Letstango.com
Started: June 2013
Founder: Alex Tchablakian
Based: Dubai
Industry: e-commerce
Initial investment: Dh10 million
Investors: Self-funded
Total customers: 300,000 unique customers every month
The distance learning plan
Spring break will be from March 8 - 19
Public school pupils will undergo distance learning from March 22 - April 2. School hours will be 8.30am to 1.30pm
Staff will be trained in distance learning programmes from March 15 - 19
Teaching hours will be 8am to 2pm during distance learning
Pupils will return to school for normal lessons from April 5
What are the influencer academy modules?
- Mastery of audio-visual content creation.
- Cinematography, shots and movement.
- All aspects of post-production.
- Emerging technologies and VFX with AI and CGI.
- Understanding of marketing objectives and audience engagement.
- Tourism industry knowledge.
- Professional ethics.
The bio
Job: Coder, website designer and chief executive, Trinet solutions
School: Year 8 pupil at Elite English School in Abu Hail, Deira
Role Models: Mark Zuckerberg and Elon Musk
Dream City: San Francisco
Hometown: Dubai
City of birth: Thiruvilla, Kerala
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
Essentials
The flights
Emirates and Etihad fly direct from the UAE to Geneva from Dh2,845 return, including taxes. The flight takes 6 hours.
The package
Clinique La Prairie offers a variety of programmes. A six-night Master Detox costs from 14,900 Swiss francs (Dh57,655), including all food, accommodation and a set schedule of medical consultations and spa treatments.
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If you go...
Fly from Dubai or Abu Dhabi to Chiang Mai in Thailand, via Bangkok, before taking a five-hour bus ride across the Laos border to Huay Xai. The land border crossing at Huay Xai is a well-trodden route, meaning entry is swift, though travellers should be aware of visa requirements for both countries.
Flights from Dubai start at Dh4,000 return with Emirates, while Etihad flights from Abu Dhabi start at Dh2,000. Local buses can be booked in Chiang Mai from around Dh50
The specs: 2019 Aston Martin DBS Superleggera
Price, base: Dh1.2 million
Engine: 5.2-litre twin-turbo V12
Transmission: Eight-speed automatic
Power: 725hp @ 6,500pm
Torque: 900Nm @ 1,800rpm
Fuel economy, combined: 12.3L / 100km (estimate)
THE BIO
Born: Mukalla, Yemen, 1979
Education: UAE University, Al Ain
Family: Married with two daughters: Asayel, 7, and Sara, 6
Favourite piece of music: Horse Dance by Naseer Shamma
Favourite book: Science and geology
Favourite place to travel to: Washington DC
Best advice you’ve ever been given: If you have a dream, you have to believe it, then you will see it.
