The Dubai Marina skyline. Expansion in the UAE's non-oil business activity is broadly consistent with the growth trend seen since the final quarter of last year. Antonie Robertson / The National
The Dubai Marina skyline. Expansion in the UAE's non-oil business activity is broadly consistent with the growth trend seen since the final quarter of last year. Antonie Robertson / The National
The Dubai Marina skyline. Expansion in the UAE's non-oil business activity is broadly consistent with the growth trend seen since the final quarter of last year. Antonie Robertson / The National
Business activity in the non-oil private sector economies of Saudi Arabia and the UAE expanded at a brisk pace in February, with the pace of growth hitting an almost five-year high in the Emirates, the Arab world’s second-largest economy.
The seasonally adjusted Riyad Bank purchasing managers’ index – a benchmark gauge of the kingdom’s non-oil economy – rose to 57.2 in February, from 55.4 in January, staying well above the neutral 50 mark that separates growth from contraction.
The rise signals a marked improvement in operating conditions across the kingdom’s non-oil private sector economy, as the rate of growth hit its highest level since September 2023.
Businesses surveyed reported a sharp rise in output, driven by improving client demand and tourism activity in the kingdom.
New work inflows also rose at a sharper pace than in January, but remained softer than in the final quarter of 2023.
While businesses reported new client wins and stronger market conditions, some companies said competition remained strong within the domestic market.
Export orders from the kingdom also recorded a modest rebound in February.
“The upturn reflected the continued thriving of non-oil activities in the kingdom, which recorded a 4.6 per cent increase according to Gastat [General Authority of Statistics] flash estimates [in 2023],” said Riyad Bank chief economist Naif Al-Ghaith.
“The survey results also signalled expectations of a modest recovery in demand this year, driven by the acceleration of Vision 2030 projects,” he said.
The latest data also indicated a faster increase in employment, among the sharpest recorded in the past eight years.
This improvement in the job market came in tandem with increased optimism for the year ahead, as businesses surveyed showed greater confidence in demand trends in the kingdom's non-oil private sector economy.
Saudi Arabia, the world's biggest oil exporter, is transforming its economy under its Vision 2030 diversification agenda.
Riyadh has unveiled a series of initiatives and policy reforms intended to reduce its dependence on oil, broaden its non-oil economic base and support domestic industries and job growth.
Meanwhile, the headline S&P Global purchasing managers' index for the UAE climbed to 57.1 in February, up from 56.6 in January, broadly consistent with the growth trend seen since the final quarter of last year.
This pace of growth in non-oil private sector's output levels was the sharpest since the middle of 2019.
“The UAE PMI continued to signal strong upwards momentum in the non-oil economy at the start of 2024,” said David Owen, senior economist at S&P Global Market Intelligence.
“One of the PMI's largest components, the output index, rose to its highest level since June 2019, pointing to a rapid expansion of business activity as firms look to take full advantage of strong market growth and maintain a competitive edge.”
The UAE economy is expected to grow by 5 per cent this year, driven by a robust expansion in the non-oil sector and an increase in foreign direct investment, Minister of Economy Abdulla bin Touq said last week.
The non-oil economy currently accounts for 73 per cent of the UAE’s GDP a “historic first for the country”, he said last month.
The country's GDP expanded by 3.7 per cent annually in the first half of 2023, as it continued to pursue its diversification goals, Mr bin Touq said in October.
The latest survey data indicated that 38 per cent of monitored companies in the UAE recorded a month-on-month jump in business activity, driven by new business and stronger marketing.
However, companies in the non-oil private sector of the Emirates “felt a degree of pressure on their supply chains” in February due to commercial shipping challenges in the Red Sea, the survey found.
But overall supplier performance was still positive.
Abdel Fattah El Sisi, Egypt’s president, oversaw an ambitious trade conference and the Suez Canal expansion this year. Hassan Ammar / AP Photo
Russian emergency minister Vladimir Puchkov, fourth left, visits the crash site of a A321 Russian airliner in Wadi al-Zolomat, a mountainous area of Egypt’s Sinai Peninsula. Russian airline Kogalymavia’s flight 9268 crashed en route from Sharm el Sheikh to Saint Petersburg on October 31, killing all 224 people on board. AFP
Egyptian president Abdel Fattah El Sisi stands on a yacht leading a naval flotilla during a ceremony on August 6, 2015 to unveil a new waterway at the Suez Canal. EGYPTIAN PRESIDENCY / MOHAMED ABDELMOATY / AFP
On October 21, Tarek Amer was appointed the new central bank governor. Bloomberg
Meanwhile, business activity across Egypt's non-oil private sector last month contracted at the sharpest rate in slightly more than a year, driven by a worsening foreign exchange crisis and a steep drop in customer sales.
Th Egyptian non-oil economy suffered in February as “it found itself caught in the middle of the wider regional crisis”, Mr Owen said.
Red Sea shipping disruption has roughly halved the Suez Canal's revenue so far in 2024, which February PMI survey data indicated had a “considerable impact on foreign currency inflows and inflationary pressures”, he said.
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
Tenants also require a letter of no objection from their landlord before being allowed to list the property.
There is a cost of Dh1,590 before starting the process, with an additional licence fee of Dh300 per bedroom being rented in your home for the duration of the rental, which ranges from three months to a year.
Anyone hoping to list a property for rental must also provide a copy of their title deeds and Ejari, as well as their Emirates ID.
Cast: Nayanthara, Siddharth, Meera Jasmine, R Madhavan
Star rating: 2/5
Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
Bookshops: A Reader's History by Jorge Carrión (translated from the Spanish by Peter Bush),
Biblioasis
TWISTERS
Director: Lee Isaac Chung
Starring: Glen Powell, Daisy Edgar-Jones, Anthony Ramos
1: Commit to countering all types of terrorism and extremism in all their manifestations
2: Denounce violence and the rhetoric of hatred
3: Adhere to the full compliance with the Riyadh accord of 2014 and the subsequent meeting and executive procedures approved in 2014 by the GCC
4: Comply with all recommendations of the Summit between the US and Muslim countries held in May 2017 in Saudi Arabia.
5: Refrain from interfering in the internal affairs of countries and of supporting rogue entities.
6: Carry out the responsibility of all the countries with the international community to counter all manifestations of extremism and terrorism that threaten international peace and security
Cast: Loujain Adada, Zeina Khoury, Farhana Bodi, Ebraheem Al Samadi, Mona Kattan, and couples Safa & Fahad Siddiqui and DJ Bliss & Danya Mohammed
Rating: 1/5
Profile Box
Company/date started: 2015
Founder/CEO: Mohammed Toraif
Based: Manama, Bahrain
Sector: Sales, Technology, Conservation
Size: (employees/revenue) 4/ 5,000 downloads
Stage: 1 ($100,000)
Investors: Two first-round investors including, 500 Startups, Fawaz Al Gosaibi Holding (Saudi Arabia)
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)
