[ad_1]
The ICAEW report, compiled by Oxford Economics, says the UAE’s new tourism development strategy is expected to make the country the next tourism hotspot and drive significant GDP growth
According to the fourth quarter report, the UAE’s GDP growth will slow to 2.7% in 2023, but the non-oil sector will grow by 3.9%.
The UAE’s non-oil sector will remain resilient in 2023, fending off high inflation and interest rates, while overall growth will slow, according to a new Economic Insights report released on Tuesday.
The ICAEW report, compiled by Oxford Economics, said the UAE’s new tourism development strategy is expected to make the country the next tourism hotspot and drive significant GDP growth.
According to the fourth quarter report, the UAE’s GDP growth will slow to 2.7% in 2023, but the non-oil sector will grow by 3.9%.
“UAE oil production is expected to be largely flat in 2023 compared to 2022, leading to a significant slowdown in UAE GDP growth. However, Expo 2020 Dubai and the easing of Covid-related restrictions boosted the economy early this year , and momentum remains at a similar level throughout 2022,” the report said.
According to economists at Oxford Economics, there are signs that inflation in the UAE has peaked. Recent data from Dubai showed inflation slowed to 4.6% year-on-year in October, down from a peak of 7.1% in July.
“Despite the pullback in oil prices from previous highs, there are reasons for optimism. With the UAE’s most recent federal government budget including spending increases in 2023, we expect the non-oil sector to continue growing in 2024,” said Mark Billington, ICAEW International managing Director.
Strong growth in the non-oil sector will ensure the UAE remains resilient, said Scott Livermore, ICAEW economic advisor and chief economist and managing director at Oxford Economics Middle East.
“It enters the next decade with an ambitious strategy that will continue to diversify the economy across sectors and provide a roadmap for future growth.”
Tourism will continue to be the main driver of economic growth in the UAE. Dubai is once again the world’s busiest international airport, with total visitor arrivals to Dubai reaching 9.1 million in the first eight months of 2022. The UAE has also launched the National Tourism Strategy 2031, which aims to invest US$27 billion, target 40 million hotel guests and increase the industry’s contribution to GDP to US$122 billion (from US$99 billion currently). Tourist arrivals are expected to grow at an average annual rate of 10% between 2023 and 2030.
The report said the real estate sector will continue to perform strongly, with the number of real estate transactions in Dubai hitting a decade high in recent months.
“Beyond real estate, capital market growth is also deepening in Abu Dhabi and Dubai. IPO flows to local bourses in the emirate should maintain relatively strong performance in local equity markets, although equity prices are impacted by global market uncertainty.”
The report noted that the UAE also has an ambitious agenda to increase foreign direct investment through economic and trade agreements, most recently with India and Israel. The agreement with India aims to increase bilateral trade to more than $100 billion over the next five years. Just months after the Indian deal was struck, an Abu Dhabi holding company announced what is likely to be the first of many deals to invest $2 billion in India’s green infrastructure.
“Falling food and beverage prices have been the main driver of inflation and lower transport prices as commodity prices fall. However, when prices fall, inflation is unlikely to fall back to pre-pandemic levels as growth will Underpinning price pressures, especially in real estate,” the report said.
— issacjohn@khaleejtimes.com
[ad_2]
Source link