Positive forecasts from international institutions and banks such as the IMF and World Bank reflect the resilience of the domestic economy
Despite the geopolitical impacts currently facing the global economy, the UAE economy is poised for stronger growth, recovery and prosperity in the second half of the year, backed by the economic success record that has seen the UAE designated as a global economic power. Innovation drives the economy.
The resilience of the domestic economy, which has weathered the recovery phase from the impact of the Covid-19 pandemic, is reflected in the positive forecasts of international agencies and banks, including the IMF and World Bank. These international recognitions testify to the durability of the UAE economy amidst global geopolitical turmoil and adverse economic conditions, thereby validating the success of the forward-looking vision of the UAE leadership.
The International Monetary Fund recently said: “Positive economic growth is expected in the UAE, with gross domestic product expected to grow by 3.6% this year, driven by strong domestic activity.”
Following an impressive growth rate of 7.9 per cent in 2022, the UAE economy is expected to grow by 2023, benefiting from sustained tourism activity and higher capital expenditure, the IMF said in its 2022 Article IV Assessment. Maintain an upward trajectory.
The World Bank expects the UAE’s real GDP to grow by 2.8% in 2023, with the non-oil sector expected to post strong growth of 4.8%, driven by strong domestic demand, especially tourism. Real estate, construction, transportation and manufacturing.
During a recent press conference in Dubai, where World Bank officials announced a new Gulf Economic Update (GEU) titled “Health and Economic Burden of Non-Communicable Diseases in the GCC,” the bank official said the UAE’s current account balance It is also expected to rise to 11.7% by 2023. The report predicts that the UAE’s public fiscal surplus will reach 6.2% in 2023.
The international testimony is in line with the UAE Central Bank’s forecast in its Quarterly Economic Review, which said the UAE economy continued to grow steadily in the first quarter of 2023, “reflecting strong non-economic performance”. Growth in the oil sector was partially offset by a slowdown in the oil sector of the economy. Growth in 2023 has been revised down by 0.6 percentage points to 3.3%, reflecting oil production cuts agreed by OPEC+ members. The non-oil sector is expected to continue growing to support total output, albeit at a more modest pace than in 2022. “
The UAE economy is expected to grow further this year for a number of reasons, including the fact that the purchasing managers’ index rose to its highest level in five months, in May this year. The seasonally adjusted S&P Global UAE Purchasing Managers’ Index, a composite measure designed to provide an accurate overview of economic operations in the non-oil private sector, came in at 55.5 in May, pointing to a strong improvement in the sector’s performance. Although the index fell to a three-month low from 56.6 in April, it remained above the unchanged mark of 50.0 and its long-term average.
S&P Global said the strong growth in new business underscored growing confidence in the economic outlook among surveyed companies. Expectations for next year’s economic activity improved for the fifth straight month in May, reaching the highest level since late 2021.
The UAE’s progress in implementing the Comprehensive Economic Partnership Agreement will help improve trade and integration into global value chains, attract more foreign direct investment, and boost national economic growth. Such partnerships are important drivers of economic growth, creating trade and investment opportunities and energizing regional and global trade and investment flows.