The UAE aims to double the size of its economy over the coming decade, economy minister Abdulla Bin Touq said on Saturday.
The Ministry of Economy and other government entities are "working according to an ambitious vision to double our national economy over the next 10 years to reach Dh3 trillion by 2031", Mr Bin Touq said.
The country is pressing forward to speed up its economic recovery by embracing technology linked to the Fourth Industrial Revolution, he added.
The UAE's economy is set to grow by 2.5 per cent this year, and its non-oil economy by 3.6 per cent, according to estimates from the Central Bank of the UAE. The economy is forecast to expand 3.5 per cent in 2022 and non-oil growth will rise to 3.9 per cent.
In 2020, the UAE’s gross domestic product stood at almost Dh1.42tn at constant prices, with non-oil GDP making up just over Dh1tn of this. The country was "not immune" to the global economic shock experienced after Covid-19, given that its economy "is linked through foreign trade, foreign investment, tourism and the logistical sector with the movement of trade and investment and global transportation", the minister said.
Preliminary results from the UAE's Federal Statistics and Competitiveness Centre showed the country's economy shrank 6.1 per cent last year and non-oil GDP contracted 6.2 per cent, which the ministry described as a "comparatively low decline" given the slump in other major global economies.
The euro area economy shrank 6.6 per cent last year, with France contracting 8.2 per cent and Italy 8.9 per cent, according to the latest data from the International Monetary Fund. The United Kingdom's economy shrank 9.9 per cent. Overall, advanced economies contracted 4.7 per cent and the US 3.5 per cent.
"We expect to see a rebound in non-oil activity supported by the domestic vaccination programme and the limited [Covid-19] restrictions. Key externally facing sectors should also see a pickup in activity, though Covid waves in key sources of tourism into the UAE will remain headwinds," Monica Malik, chief economist at Abu Dhabi Commercial Bank, said. "Progress with global vaccinations will be essential for the recovery in sectors such as tourism and aviation."
Although there is still fluidity in the global economy with the surge in Covid-19 infections that provides an uncertain outlook for travel and tourism, "when a recovery does take hold it is likely to be strong", Scott Livermore, chief economist at Oxford Economics, said.
"And the surge in travel to Dubai [at the end of last year] illustrates the willingness of travellers to spring back. This also bodes well for the success of the delayed Expo 2020, which creates an opportunity for a faster recovery in Dubai," he said.
The UAE's plan to increase oil production to 5 million barrels per day, up from about 2.8 million bpd last year "will make a significant contribution" towards boosting the country's GDP over the coming decade. Other policies aimed at supporting long-term growth, such as the Operation 300bn initiative announced by the Ministry of Industry and Advanced Technology in March, will also play their part, Mr Livermore said.
Operation 300bn, backed by the Emirates Development Bank, is a plan to increase industry's contribution to GDP to Dh300bn by 2031 from Dh133bn currently. This involves the creation of about 13,500 new companies in the sector and an increase in industrial R&D spending to 2 per cent of GDP by 2031, from 1.3 per cent currently.
"Visa and ownership rules no doubt have moved in the right direction and may be underpinning the stabilisation already on display of completed real estate prices in both Dubai and Abu Dhabi," Hasnain Malik, emerging and frontier markets strategy analyst at Tellimer in Dubai, said.