UAE economy grew 3.9% in 2024 on non-oil sector boost, Central Bank says

Hydrocarbon economy expanded 1.6 per cent last year and is estimated to grow by 3.6 per cent this year

The UAE Central Bank says the sector's total assets in the country exceeded Dh4.56 trillion in 2024. Wam

The UAE’s economy grew by 3.9 per cent in 2024, its central bank has said, driven by growth momentum in the country’s non-oil sectors as the Arab world’s second-largest economy continues to push for diversification.

Real gross domestic product for the 12-month period to the end of December grew 1 percentage point less than the UAE Central Bank's earlier estimate of 4 per cent.

The banking regulator expects the country’s GDP to expand at 4.7 per cent in 2025 and by 5.7 per cent in 2026, it said in its 2024 annual report released on Monday.

The non-oil economy grew by 4.6 per cent last year and is expected to touch 5.1 per cent this year, UAE Central Bank data indicated.

The country's hydrocarbon GDP, which contracted by 3.1 per cent in 2023, expanded by 1.6 per cent last year. This year, the central bank expects the oil economy to increase 3.6 per cent and by 8.5 per cent the following year.

The headline inflation in the country is estimated to have reached 1.7 per cent last year and is expected to grow further to 2 per cent this year, central bank data showed.

The economic growth last year was “supported by a robust non-hydrocarbon sector performance and gradual recovery in hydrocarbon activities”, while this year's growth will be “driven by strengthening performance across both hydrocarbon and non-hydrocarbon sectors”, the report said.

“The energy sector is expected to benefit from the planned easing of production cuts starting in Q2 2025, while the non-hydrocarbon sector continues to gain from government initiatives supporting foreign investment and economic diversification”, and these trends, “combined with increased oil and gas production”, will further boost growth next year, it added.

The UAE has been focusing heavily on diversifying its economy 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.

The UAE's non-oil foreign trade also hit a record Dh3 trillion ($816.9 billion) 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 the UAE's 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.

The UAE banking system also continued to achieve “exceptional strides” in 2024, with total banking sector assets reaching Dh4.56 trillion ($1.24 trillion)”, a 12 per cent year-on-year rise.

The sharp growth in banking assets last year has reinforced its “well-established foundations with strong fundamentals, reflected in high capitalisation levels, strong profitability, sufficient liquidity and stable financial reserves”, the central bank said.

“Our transformative initiatives and projects, launched during 2024, have contributed to enhancing the efficiency and competitiveness of the financial sector, building a more resilient and sustainable financial system," said UAE Central Bank governor Khaled Balama.

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