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UAE economy poised for stronger growth in second half of 2023

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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.According to the state news agency, an innovation-driven economy WAM.

The strength of the UAE economy and recovery from the Covid-19 pandemic is evident in positive forecasts from international institutions and banks, including the UAE International Monetary Fund (International Monetary Fund) and world bank.

“Positive economic growth is expected in the UAE, with GDP expected to expand by 3.6 percent this year, driven by strong domestic activity,” the IMF said recently.

Following a growth rate of 7.9% 2022The IMF said in its 2022 Article IV assessment that the UAE economy is expected to maintain its upward trend in 2023, benefiting from continued tourism activity and higher capital expenditure.

Likewise, the World Bank forecasts real GDP growth in the UAE of 2.8% in 2023.

The non-oil sector is expected to grow strongly at 4.8%, mainly driven by strong domestic demand in key sectors such as tourism, real estate, construction, transport and manufacturing.

The new World Bank Gulf Economic Update (GEU), titled “TheThe health and economic burden of noncommunicable diseases in the Gulf Cooperation CouncilThe UAE’s current account balance is also expected to rise to 11.7 percent in 2023, the bank official said.

The report expects the UAE to achieve a public fiscal surplus of 6.2% by 2023.

The international agency’s assessment is in line with the forecasts provided by the UAE Central Bank in its quarterly economic review.

According to apex bank, the UAE economy maintained its strong growth trajectory in the first quarter of 2023, mainly driven by a strong performance in the non-oil sector, despite a slight slowdown in the oil sector.

The central bank cut its growth forecast for 2023 by 0.6 percentage points to 3.3%, taking into account the oil production cuts agreed by OPEC+ members.

The non-oil sector is expected to continue 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, and attract more foreign direct investment, boosting national economic growth.

Such partnerships are important drivers of economic growth, create trade and investment opportunities, and contribute to the dynamism of regional and global trade and investment flows.

read: Tourism to contribute AED180.6 billion to UAE economy this year

Also read: Public cloud contribution to UAE economy could reach $181 billion by 2033, report says

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