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.
UAE's long-term visas explained
If you go
Flights
Emirates flies from Dubai to Phnom Penh with a stop in Yangon from Dh3,075, and Etihad flies from Abu Dhabi to Phnom Penh with its partner Bangkok Airlines from Dh2,763. These trips take about nine hours each and both include taxes. From there, a road transfer takes at least four hours; airlines including KC Airlines (www.kcairlines.com) offer quick connecting flights from Phnom Penh to Sihanoukville from about $100 (Dh367) return including taxes. Air Asia, Malindo Air and Malaysian Airlines fly direct from Kuala Lumpur to Sihanoukville from $54 each way. Next year, direct flights are due to launch between Bangkok and Sihanoukville, which will cut the journey time by a third.
The stay
Rooms at Alila Villas Koh Russey (www.alilahotels.com/ kohrussey) cost from $385 per night including taxes.
Dubai World Cup factbox
Most wins by a trainer: Godolphin’s Saeed bin Suroor(9)
Most wins by a jockey: Jerry Bailey(4)
Most wins by an owner: Godolphin(9)
Most wins by a horse: Godolphin’s Thunder Snow(2)
Wenger's Arsenal reign in numbers
1,228 - games at the helm, ahead of Sunday's Premier League fixture against West Ham United.
704 - wins to date as Arsenal manager.
3 - Premier League title wins, the last during an unbeaten Invincibles campaign of 2003/04.
1,549 - goals scored in Premier League matches by Wenger's teams.
10 - major trophies won.
473 - Premier League victories.
7 - FA Cup triumphs, with three of those having come the last four seasons.
151 - Premier League losses.
21 - full seasons in charge.
49 - games unbeaten in the Premier League from May 2003 to October 2004.
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.”
LILO & STITCH
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Rating: 3.5/5
The specs
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Company profile
Company: Rent Your Wardrobe
Date started: May 2021
Founder: Mamta Arora
Based: Dubai
Sector: Clothes rental subscription
Stage: Bootstrapped, self-funded
