The UAE economy's growth in 2023 was stronger than the most recent estimate, driven by non-oil sector growth.
The Arab world’s second-largest economy expanded by 3.6 per cent last year, compared to the 3.1 per cent estimated by the Central Bank of the UAE (CBUAE) in the fourth quarter, the banking regulator said on Thursday.
Non-oil gross domestic product expanded by 6.2 per cent during the period, it said in its annual report.
It, however, downwardly revised its growth projections for 2024 to 3.9 per cent from the previous estimate of 4.2 per cent.
Growth is projected to accelerate to 6.2 per cent in 2025, as oil production is forecast to increase significantly due to the Opec+ decisions and continued expansion of the non-oil sector, according to the bank.
This month, Opec+ agreed to extend output cuts of 3.66 million barrels per day, which were initially planned to end this year, until the end of 2025.
However, the group plans to gradually unwind the voluntary curbs of 2.2 million bpd on a monthly basis from October 2024 until September 2025, but said that “the monthly increases can be paused or reversed subject to market conditions”.
Next year, oil GDP is expected to expand by 8.4 per cent with production levels in line with the Opec+ policy.
“The CBUAE projects that the UAE’s real GDP will increase … in 2024, driven by a robust growth of 5.4 per cent in the non-oil sector,” Sheikh Mansour bin Zayed, Vice President, Deputy Prime Minister and Chairman of the Presidential Court, said.
Sheikh Mansour also added the UAE is “committed to sustainability and effectively combating climate change, demonstrated by the successful hosting of Cop28".
“The conference set higher standards for climate action, with the UAE placing an emphasis on addressing climate change through an ambitious climate action strategy and its Net Zero 2050 initiative.”
The non-oil sector continued to perform strongly in 2023, the UAE Central Bank said.
“After recording a growth rate of 7.1 per cent in 2022, non-oil GDP expanded by 6.2 per cent in 2023.,” it said.
“The strong performance reflects a variety of factors, including the recovery in global travel and tourism in the aftermath of the full removal of Covid-19-related restrictions, the strong performance in real estate and construction sectors propelled by migration inflows.”
For 2024, the Central Bank projects non-oil GDP growth to slow to 5.4 per cent due to “a stabilisation of migration inflows, slowing growth in key trading partners, and carryover effects from a strong 2023”.
In 2025, non-oil GDP growth is expected to remain steady at 5.3 per cent, it said, adding that “successful reform implementation and a decline in interest rates in advanced economies, which could boost external demand and trigger capital inflows in emerging markets, pose upside risks to non-oil growth”.
On the other hand, downside risks include new supply disruptions associated with geopolitical shocks, upticks in inflation that could lead to persistently tight monetary conditions and depressed external demand, as well as a deepening of property sector woes in China, it added.
The latest growth projections come as the UAE’s economy continued to rebound strongly from the coronavirus pandemic-induced slowdown on the back of government reforms and higher oil prices.
Earlier this year, the International Monetary Fund projected faster UAE growth on economic diversification boost.
The overall real gross domestic product of the UAE is expected to expand by an annual 4 per cent in 2024, the fund said in May at the conclusion of an article IV consultation with the country.
The latest projection by the IMF is 0.5 percentage points higher than the 3.5 per cent GDP growth it had estimated in its World Economic Outlook report in April.
Minister of Economy Abdulla bin Touq expects the country’s economy to expand by 5 per cent this year.
The country's non-oil sector, which accounts for about 73 per cent of GDP, will underpin growth this year and the next, he told state news agency Wam in February.
Meanwhile, inflation in the UAE declined to 1.6 per cent in 2023 from 4.8 per cent in 2022, on the back of lower energy prices, that led to a decline in transportation prices of 5.6 per cent during the period, the UAE central bank said.
Across the other components of the consumer basket, the largest price increases took place in restaurants and hotels at 6.6 per cent, food and beverages at 3.8 per cent and furniture and household goods at 3.2 per cent.
Labour dispute
The insured employee may still file an ILOE claim even if a labour dispute is ongoing post termination, but the insurer may suspend or reject payment, until the courts resolve the dispute, especially if the reason for termination is contested. The outcome of the labour court proceedings can directly affect eligibility.
- Abdullah Ishnaneh, Partner, BSA Law
Results
5pm: Wadi Nagab – Maiden (PA) Dh80,000 (Turf) 1,200m; Winner: Al Falaq, Antonio Fresu (jockey), Ahmed Al Shemaili (trainer)
5.30pm: Wadi Sidr – Handicap (PA) Dh80,000 (T) 1,200m; Winner: AF Majalis, Tadhg O’Shea, Ernst Oertel
6pm: Wathba Stallions Cup – Handicap (PA) Dh70,000 (T) 2,200m; Winner: AF Fakhama, Fernando Jara, Mohamed Daggash
6.30pm: Wadi Shees – Handicap (PA) Dh80,000 (T) 2,200m; Winner: Mutaqadim, Antonio Fresu, Ibrahim Al Hadhrami
7pm: Arabian Triple Crown Round-1 – Listed (PA) Dh230,000 (T) 1,600m; Winner: Bahar Muscat, Antonio Fresu, Ibrahim Al Hadhrami
7.30pm: Wadi Tayyibah – Maiden (TB) Dh80,000 (T) 1,600m; Winner: Poster Paint, Patrick Cosgrave, Bhupat Seemar
Getting%20there%20and%20where%20to%20stay
%3Cp%3EFly%20with%20Etihad%20Airways%20from%20Abu%20Dhabi%20to%20New%20York%E2%80%99s%20JFK.%20There's%2011%20flights%20a%20week%20and%20economy%20fares%20start%20at%20around%20Dh5%2C000.%3Cbr%3EStay%20at%20The%20Mark%20Hotel%20on%20the%20city%E2%80%99s%20Upper%20East%20Side.%20Overnight%20stays%20start%20from%20%241395%20per%20night.%3Cbr%3EVisit%20NYC%20Go%2C%20the%20official%20destination%20resource%20for%20New%20York%20City%20for%20all%20the%20latest%20events%2C%20activites%20and%20openings.%3Cbr%3E%3C%2Fp%3E%0A
Desert Warrior
Starring: Anthony Mackie, Aiysha Hart, Ben Kingsley
Director: Rupert Wyatt
Rating: 3/5
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
2.0
Director: S Shankar
Producer: Lyca Productions; presented by Dharma Films
Cast: Rajnikanth, Akshay Kumar, Amy Jackson, Sudhanshu Pandey
Rating: 3.5/5 stars
Four motivational quotes from Alicia's Dubai talk
“The only thing we need is to know that we have faith. Faith and hope in our own dreams. The belief that, when we keep going we’re going to find our way. That’s all we got.”
“Sometimes we try so hard to keep things inside. We try so hard to pretend it’s not really bothering us. In some ways, that hurts us more. You don’t realise how dishonest you are with yourself sometimes, but I realised that if I spoke it, I could let it go.”
“One good thing is to know you’re not the only one going through it. You’re not the only one trying to find your way, trying to find yourself, trying to find amazing energy, trying to find a light. Show all of yourself. Show every nuance. All of your magic. All of your colours. Be true to that. You can be unafraid.”
“It’s time to stop holding back. It’s time to do it on your terms. It’s time to shine in the most unbelievable way. It’s time to let go of negativity and find your tribe, find those people that lift you up, because everybody else is just in your way.”
Three ways to boost your credit score
Marwan Lutfi says the core fundamentals that drive better payment behaviour and can improve your credit score are:
1. Make sure you make your payments on time;
2. Limit the number of products you borrow on: the more loans and credit cards you have, the more it will affect your credit score;
3. Don't max out all your debts: how much you maximise those credit facilities will have an impact. If you have five credit cards and utilise 90 per cent of that credit, it will negatively affect your score.
