The UAE’s economy grew by 3.8 per cent during the first nine months of last year, with growth driven by a strong expansion in non-oil sectors as the country continues to diversify its economy.
Real gross domestic product of the Emirates for the nine-month period to the end of September rose to Dh1.32 trillion ($359.4 billion). The non-oil economy grew by 4.5 per cent annually to Dh987 billion, accounting for nearly 75 per cent of the country's economic activity, while the oil sector made up the rest, state news agency Wam reported.
The continuous growth of the national economy, “reaffirms the success of the UAE’s economic policies and strategies aimed at enhancing economic diversification, facilitating business activities, and promoting the expansion of new economy sectors as a key driver for sustainable economic and social development”, Wam quoted Abdullah bin Touq Al Marri, Minister of Economy, as saying.
“National efforts continue to increase the contribution of non-oil sectors to the national economy, develop more flexible and competitive economic legislations, enhance economic openness to the world, and build productive partnerships with key regional and global markets,” Mr Al Marri said.
These efforts support the objectives of the “We the UAE 2031" vision, which aims to raise the country’s GDP to Dh3 trillion by the next decade and establish the UAE as a global hub for the new economy, he added.
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.
Last September, the UAE Central Bank said it expected the country's economy to grow by 4 per cent last year, an increase from its June estimate of 3.9 per cent, on the back of a boost from its non-oil sector. Growth will also be supported by economic agreements the country has signed with its global trade partners, the regulator said at the time.
The UAE's non-oil foreign trade also hit a record Dh3 trillion last year − up 14.6 per cent year-on-year.
The Comprehensive Economic Partnership Agreements (Cepas) with various nations, from Colombia to Australia, have contributed Dh135 billion to its non-oil trade with partner nations, an increase of 42 per cent compared to the previous year, Sheikh Mohammed bin Rashid, Vice President and Ruler of Dubai, said last month.
Cepas aim to reduce tariffs and remove bottlenecks that hamper trade. This programme is projected to increase national exports by 33 per cent and add more than Dh153 billion to the economy by 2031.
Dubai lender Emirates NBD said in a note on Thursday that it estimates the oil sector to have expanded by more than 1 per cent last year.
“On an annual basis, we estimate the economy expanded by 3.9 per cent in the third quarter compared with the same period a year earlier, with the non-oil sector expanding by 4.6 per cent,” the bank said.
“Based on activity data for the fourth quarter, it would appear that there was an acceleration in activity in the final months of the year, supporting our estimate of strong non-oil activity in 2024. The pace of growth announced for the third quarter is in line with our target of 3.7 per cent growth for the year as a whole.”
For 2025, the UAE Central Bank expects the country's economy to grow by 6 per cent, while the International Monetary Fund forecasts expansion of 5.1 per cent.
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Tips for newlyweds to better manage finances
All couples are unique and have to create a financial blueprint that is most suitable for their relationship, says Vijay Valecha, chief investment officer at Century Financial. He offers his top five tips for couples to better manage their finances.
Discuss your assets and debts: When married, it’s important to understand each other’s personal financial situation. It’s necessary to know upfront what each party brings to the table, as debts and assets affect spending habits and joint loan qualifications. Discussing all aspects of their finances as a couple prevents anyone from being blindsided later.
Decide on the financial/saving goals: Spouses should independently list their top goals and share their lists with one another to shape a joint plan. Writing down clear goals will help them determine how much to save each month, how much to put aside for short-term goals, and how they will reach their long-term financial goals.
Set a budget: A budget can keep the couple be mindful of their income and expenses. With a monthly budget, couples will know exactly how much they can spend in a category each month, how much they have to work with and what spending areas need to be evaluated.
Decide who manages what: When it comes to handling finances, it’s a good idea to decide who manages what. For example, one person might take on the day-to-day bills, while the other tackles long-term investments and retirement plans.
Money date nights: Talking about money should be a healthy, ongoing conversation and couples should not wait for something to go wrong. They should set time aside every month to talk about future financial decisions and see the progress they’ve made together towards accomplishing their goals.
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IF YOU GO
The flights: FlyDubai offers direct flights to Catania Airport from Dubai International Terminal 2 daily with return fares starting from Dh1,895.
The details: Access to the 2,900-metre elevation point at Mount Etna by cable car and 4x4 transport vehicle cost around €57.50 (Dh248) per adult. Entry into Teatro Greco costs €10 (Dh43). For more go to www.visitsicily.info
Where to stay: Hilton Giardini Naxos offers beachfront access and accessible to Taormina and Mount Etna. Rooms start from around €130 (Dh561) per night, including taxes.
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
