The UAE economy expanded by 3.6 per cent last year, driven by strong non-oil sector growth as the country continues to pursue its diversification goals.
The country's gross domestic product reached Dh1.68 trillion ($456.56 billion) at constant prices last year, preliminary estimates from the Federal Competitiveness and Statistics Centre showed on Thursday.
At current prices, meanwhile, the Emirates' GDP stood at Dh514.13 billion, representing an annual expansion of about 2.3 per cent.
The non-oil sector grew 6.2 per cent to Dh1.25 trillion last year, while the oil and gas sector contracted by 3.1 per cent.
Financial services was the fastest-growing sector in 2023 in the Arab world’s second-largest economy, expanding 14.3 per cent year-on-year after growing 6.6 per cent in 2022.
It was followed by transport and logistics, construction and real estate services, the data showed.
“The UAE’s economy has been remarkably resilient to both a lacklustre external backdrop as well as significantly higher interest rates in 2023,” Khatija Haque, head of research and chief economist at Emirates NBD, said in a research note on Wednesday.
“We expect public sector investment – particularly in transport and other infrastructure – to remain robust in 2024 and beyond, as the government has announced several large long-term projects including the expansion of the Etihad Rail network and Al Maktoum Airport.”
She added that this will continue to underpin non-oil GDP growth, offsetting any moderation in private-sector investment and household consumption.
The Dubai-based lender also raised its forecast for UAE’s non-oil growth this year to 5 per cent from 4.5 per cent previously, increasing the estimate for the country’s headline GDP growth to 3.7 per cent, from 3.3 per cent.
The UAE’s oil and gas production is likely to remain constrained by Opec+ production cuts this year, Emirates NBD said.
The producer alliance is widely expected by analysts to extend voluntary cuts of 2.2 million barrels per day until the end of the year. Opec+ currently has total output curbs of 5.86 million bpd in place, which is equal to about 6 per cent of the global demand.
“If there is an increase in the UAE’s target production level, this would pose an upside risk to our headline GDP growth forecast,” Emirates NBD said.
Earlier this week, the International Monetary Fund said it expected the UAE’s overall real GDP to expand by an annual 4 per cent this year, up from its April estimate of 3.5 per cent economic growth.
The IMF said that economic growth in the Emirates was broad-based, led by robust activity in the tourism, construction, manufacturing and financial services sectors.
The UAE is pursuing several economic initiatives, including Operation 300bn, a programme to position the country as an industrial centre by 2031 through efforts to increase the industrial sector’s GDP contribution to Dh300bn by 2031, from Dh133 billion in 2021.
The country's economy rebounded strongly from the slowdown caused by Covid-19, growing by 7.9 per cent in 2022, the most in 11 years, to Dh1.62 trillion at constant prices. It has maintained a robust growth momentum since.
Terror attacks in Paris, November 13, 2015
- At 9.16pm, three suicide attackers killed one person outside the Atade de France during a foootball match between France and Germany
- At 9.25pm, three attackers opened fire on restaurants and cafes over 20 minutes, killing 39 people
- Shortly after 9.40pm, three other attackers launched a three-hour raid on the Bataclan, in which 1,500 people had gathered to watch a rock concert. In total, 90 people were killed
- Salah Abdeslam, the only survivor of the terrorists, did not directly participate in the attacks, thought to be due to a technical glitch in his suicide vest
- He fled to Belgium and was involved in attacks on Brussels in March 2016. He is serving a life sentence in France
Top investing tips for UAE residents in 2021
Build an emergency fund: Make sure you have enough cash to cover six months of expenses as a buffer against unexpected problems before you begin investing, advises Steve Cronin, the founder of DeadSimpleSaving.com.
Think long-term: When you invest, you need to have a long-term mindset, so don’t worry about momentary ups and downs in the stock market.
Invest worldwide: Diversify your investments globally, ideally by way of a global stock index fund.
Is your money tied up: Avoid anything where you cannot get your money back in full within a month at any time without any penalty.
Skip past the promises: “If an investment product is offering more than 10 per cent return per year, it is either extremely risky or a scam,” Mr Cronin says.
Choose plans with low fees: Make sure that any funds you buy do not charge more than 1 per cent in fees, Mr Cronin says. “If you invest by yourself, you can easily stay below this figure.” Managed funds and commissionable investments often come with higher fees.
Be sceptical about recommendations: If someone suggests an investment to you, ask if they stand to gain, advises Mr Cronin. “If they are receiving commission, they are unlikely to recommend an investment that’s best for you.”
Get financially independent: Mr Cronin advises UAE residents to pursue financial independence. Start with a Google search and improve your knowledge via expat investing websites or Facebook groups such as SimplyFI.
Global state-owned investor ranking by size
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United States
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China
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UAE
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Japan
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Norway
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Canada
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Singapore
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Australia
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Saudi Arabia
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South Korea
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