UAE Economy Achieves Unprecedented Milestone
The United Arab Emirates (UAE) has achieved a significant milestone in its economic diversification journey, marking what officials are calling “a historic first.” The nation’s robust economy has reached a remarkable point with the non-oil sector now contributing a substantial 73 percent to the country’s total Gross Domestic Product (GDP).
Abdullah bin Touq Al Marri, the Minister of Economy, emphasized the significance of this achievement, attributing it to the confidence of both the private sector and international investors in the UAE’s investment environment. He expressed optimism about the future trajectory of the economy, projecting a growth rate of up to 5.0 percent for the year 2024.
Speaking at the third annual conference of Investopia, a global investment platform launched by the UAE government in September 2021, Minister Al Marri highlighted the pivotal role of the private sector in shaping the new economic landscape. He underscored the importance of aligning with global changes and challenges and outlined the UAE’s strategic focus on sustainable and flexible economic sectors. These sectors, numbering more than 16, encompass a wide range of industries including health technology, agriculture, education, financial services, and artificial intelligence, all contributing to the resilience and strength of the national economy.
The Investopia conference, held in Abu Dhabi under the theme ‘Emerging Economic Frontiers: Investing in the New Economy Growth Sectors,’ provided a platform to discuss and explore avenues for investment in sectors driving the future of the economy. Among the highlights, it was noted that the reversal of oil production cuts from the previous year is expected to bolster growth. Additionally, strong growth was observed in the real estate sector, with record-high residential transaction volumes recorded.
While Minister Al Marri’s GDP growth projection for 2024 falls slightly short of the Central Bank of the UAE’s forecast, which stands at 5.7 percent, various international organizations echo the sentiment of a robust economic outlook for the UAE. The International Monetary Fund (IMF) and the World Bank both anticipate strong economic growth, with GDP increases forecasted at 3.4 percent and four percent, respectively, for the year 2024.
Standard & Poor’s (S&P) Global Ratings projects UAE’s GDP to expand by over five percent in 2024, outstripping the anticipated global growth rate of 2.8 percent. Tatiana Leskova, associate director of Corporate Ratings at S&P Global Ratings, highlighted the UAE’s resilience, particularly citing the non-oil sector’s impressive growth, especially in key sectors like hospitality, wholesale and retail, and financial services.
Swiss Re Group, a leading global insurance provider, forecasts a pick-up in UAE’s real GDP growth to 4.2 percent in the current year. This growth is expected to be supported by robust construction activity, a thriving tourism sector benefiting from the National Tourism Strategy 2031, and significant government investments in infrastructure and green energy initiatives, aligned with emission reduction goals.
In summary, the UAE’s achievement of having the non-oil sector account for 73 percent of its GDP marks a significant milestone in its economic diversification journey. With a strong emphasis on sustainable and flexible economic sectors, coupled with confidence from the private sector and international investors, the UAE is poised for continued growth and prosperity in the years to come.
Looking ahead, the UAE’s economic landscape appears promising, with various factors poised to contribute to its growth trajectory. The government’s commitment to diversification, coupled with strategic investments in key sectors, positions the nation favorably in the global economic landscape.
One of the driving forces behind the UAE’s economic resilience is its focus on innovation and technology. The country has emerged as a hub for cutting-edge advancements, particularly in fields like artificial intelligence (AI), health technology, and renewable energy. These sectors not only contribute significantly to GDP but also enhance the nation’s competitiveness on the global stage.
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