The UAE economy grew by 3.4 per cent in the first quarter of the year, with a strong performance by the non-oil sector driving the expansion.
The country’s real GDP reached Dh430 billion ($117 billion) during the January to March period, the Ministry of Economy said on Monday, quoting preliminary estimates from the Federal Competitiveness and Statistics Centre. The non-oil sector expanded by 4 per cent year on year during the quarter, led by financial and insurance activities, which grew by 7.9 per cent.
“This growth can be attributed to the significant increase in the local credit granted to the private sector,” the ministry said.
The GDP figures “underline the resilience and vitality of the national economy and exemplify its ability to continue on the path of sustainable growth” and also “reflect the UAE’s commitment to fostering economic diversification focused on knowledge economy sectors”, said Abdulla bin Touq, Minister of Economy.
The UAE, the Arab world's second-largest economy, has been focusing heavily on diversifying its economy away from oil by developing sectors such as technology, manufacturing, tourism, trade and innovation. The country has introduced several reforms including longer-stay residence visas as well as new visa categories to attract more talent.
Its non-oil foreign trade hit a record Dh1.4 trillion in the first six months of this year as it continues to forge closer trade ties with partners around the world.
The UAE's economy rose by 3.6 per cent last year, driven by a 6.2 per cent boost from the non-oil sector, the UAE Central Bank said in June. The banking regular revised down its growth projections for 2024 to 3.9 per cent from a previous estimate of 4.2 per cent, mainly due to a drop in oil output.
Growth is projected to accelerate to 6.2 per cent next year, with oil production forecast to increase significantly as Opec eases cuts, while the non-oil sector continues to grow, the Central Bank said.
The UAE's 2031 vision aims to raise its GDP to Dh3 trillion by the next decade.
In the first quarter of this year, the non-oil sector received a boost from the transport and storage industry, which grew by 7.3 per cent, the Ministry of Economy said. This growth was driven by the "notable increase" in the number of people passing through the country's airports, which reached 36.5 million during the first three months of this year, up 14.7 per cent annually.
"The UAE's ports have demonstrated exceptional performance during this time, with Dubai's international ports witnessing a 3.7 per cent growth in the number of containers handled, while Abu Dhabi's ports experienced a 36 per cent increase in cargo-handling volume on an annual basis," the ministry added.
Construction and building activities grew 6.2 per cent in line with the "several development projects initiated by the UAE government in early 2024", the ministry said. They saw a "substantial rise" in the government’s public capital expenditures, reaching Dh4.8 billion.
Luxury property launches in Dubai - in pictures
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The Palm Jumeirah saw the majority of deals in luxury and super luxury sales in Dubai in 2023. AFP -
At 450m, the Franck Muller Aeternitas tower will be one of the tallest in the city when complete in 2027. It will feature 649 one, two and three-bedroom apartments, plus duplexes, over 106 floors – all topped by a giant clock. Photo: London Gate -
Bayz 101 by Danube will have 1,346 apartments and is the developer's largest project to date in terms of both units and overall space. Photo: Danube Properties -
Sharjah property developer Arada has launched sales for its luxury project in Dubai, the Armani Beach Residences at Palm Jumeirah. Prices start at Dh21 million ($5.7m). Photo: Arada -
Designed by Japanese Pritzker-Prize-winning architect Tadao Ando, in collaboration with fashion icon Giorgio Armani, Armani Beach Residences features 53 two to five-bedroom residences, plus penthouses and two presidential suites. Photo: Arada -
One of the largest private penthouses in Dubai is on sale for Dh600 million. It comprises the three top-three levels and rooftop of Raffles The Palm Dubai Residences. Photo: Emerald Palace Group -
Dubai's AHS Properties has launched a $850 million project called Casa Canal, located at Dubai Water Canal. Photo: AHS Properties -
Casa Canal will have a mix of residences, including three-bedroom penthouses, four and five-bedroom villas and six-bedroom mansions. Units are priced between Dh22.5 million and Dh185 million and the project is set to be delivered in late 2025. Photo: AHS Properties -
Nakheel, the developer behind The Palm Jumeirah, launched the first waterfront villa project on the Palm Jebel Ali in 2023. Leslie Pableo / The National -
The launch of properties on four fronds of Palm Jebel Ali offer two types of homes – coral and beach villas, says Nakheel. Photo: Nakheel -
Dubai developer Sankari Properties is building a $1 billion ultra-luxury project in Marasi Business Bay. Units will start at $10 million. Photo: Sankari Properties -
Damac launched Cavalli Couture on Dubai Water Canal in 2022. The 14-storey building features 70 units, comprising three, four and five-bedroom duplex sky villas and duplex penthouses. Photo: Damac -
Jumeirah Bay Island is one of Dubai's prime residential neighbourhoods. Photo: Bulgari -
There were close to 50 sales of Jumeirah Bay Island properties in excess of $10 million in 2023. -
Also much sought-after is The Mansions, Lanai Islands, Tilal Al Ghaf, Dubai. Photo: Knight Frank -
A luxury villa in Dubai's Emirates Hills sold for Dh102.8 million in 2022. Photo: Phoenix Homes
The restaurant and hotel sector also expanded 4.6 per cent, mainly due to a boost in tourism, with Dubai alone welcoming 5.18 million international tourists in the first quarter.
The UAE is predicted to be the 10th biggest recipient of inbound tourism spending globally this year, the World Travel and Tourism Council said last week. International visitors to the UAE will spend an estimated $52.2 billion in the country this year, up 9.4 per cent annually, the tourism body said in a report.
Overall, trade made the largest contribution to the UAE's non-oil GDP in the first quarter, accounting for 16.1 per cent, the Ministry of Economy said. It was followed by manufacturing (14.6 per cent), financial and insurance activities (13.4 per cent), construction and building (11.8 per cent) and real estate (7.1 per cent).
