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Tuesday, May 30, 2023

Non-oil sector to drive strong UAE growth in 2023

The UAE aims to double the size of its economy by 2031 and move away from hydrocarbons.

The UAE is expected to post strong economic growth in 2023, according to economists, despite a slowdown largely caused by OPEC+ policies that reversed last year’s rise in oil production.

According to ICAEW and compiled by Oxford Economics.

Hanadi Khalife, head of the Middle East at ICAEW, said that despite oil prices retreating from previous highs, there were reasons for optimism. “Tariffs have been significantly reduced under the UAE’s recent trade agreement. This leaves room for the UAE to further expand and diversify its non-oil sector and continue to grow.”

The UAE aims to double the size of its economy by 2031 and move away from hydrocarbons. “In order to do that, we need 7.0% annual GDP growth,” UAE Economy Minister Abdulla bin Touq Al Marri said on the sidelines of the recent Investopia conference in Abu Dhabi.

Essam Abu Suleiman, the World Bank’s regional director for the Gulf Cooperation Council, said in a recent interview that despite the difficult global economic situation, the UAE economy is estimated to grow by about 4.1 percent next year, which is extremely important. The land benefited from a strong recovery in non-economies. – Oil economy.

Oil production in the UAE is expected to be roughly flat in 2023 compared to 2022. “However, high-frequency data, as well as anecdotal evidence on activity, suggest that the non-oil economy continues to perform strongly. The PMI for the non-oil sector was 54.3 in February, a three-month high and remains in expansionary territory through 2022. The current increase in activity It also led to an improvement in the labor market,” said analysts at Oxford Economics.

Oil sector revenues are expected to remain strong despite weaker oil prices and cuts in production quotas by OPEC+. That would allow the government to support overall GDP growth this year while running a budget surplus of 3.7% of GDP, down from 4.2% of GDP in 2022.

“UAE authorities are taking weak oil prices as an opportunity to implement policies that encourage the development of new industries such as the digital economy, creative industries and scientific innovation as part of the ‘We UAE 2031’ vision.” It entered the ICAEW Economic Advisor and Chief, Oxford Economics Middle East Economist and managing director Scott Livermore said: “Over the next decade, we will set out an ambitious strategy to continue diversifying the economy across sectors and provide a roadmap for future growth. “

The real estate sector continued to perform strongly, driving momentum. Sales prices for residential properties have been falling for years, but the market is now rebounding, with prices in Abu Dhabi rising in recent months and real estate sales in Dubai hitting a decade high, the report said.

“Positive momentum in the property market is expected to continue; however, rents are likely to gradually increase moderately as new supply comes online in 2023.”

Another growth driver is tourism, which is in rapid recovery mode. “Dubai once again ranks among the world’s busiest international airports after a boost from the World Cup in Qatar, with passenger numbers up 67% year-on-year in the fourth quarter of 2022 to the highest level since 2019. Tourism is expected to continue to recover,” the report predicts. Tourists will increase by 20% by 2023, surpassing pre-pandemic levels,” analysts said in a note.

Copyright © 2022 Khaleej Times. all rights reserved. Courtesy of SyndiGate Media Inc. (Syndicate Information).

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