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 GDPexceeding 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.
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.