Emirates NBD has revised its non-oil growth forecast for the UAE to 5.0 per cent this year, up from 4.5 per cent, leading to an increase in headline GDP growth to 3.7 per cent. The bank expects no growth in the oil and gas sector due to Opec+ production limits. However, an increase in the UAE’s target production level could pose an upside risk to the GDP growth forecast. The UAE’s economy has shown resilience to external factors and higher interest rates in 2023, with only a modest easing in monetary policy expected towards the end of the year.
Despite a potential slowdown in private sector investment, Emirates NBD anticipates robust public sector investment in transport and infrastructure projects, including the expansion of the Etihad Rail network and Al Maktoum Airport, to drive non-oil GDP growth. In Dubai, GDP grew by 3.3 per cent in 2023, with transport, logistics, and hospitality leading the way, followed by ICT and real estate services. However, manufacturing and wholesale and retail trade in Dubai grew at a slower pace compared to the national level.
Abu Dhabi’s non-oil GDP expanded by 9.1 per cent in 2023, slightly lower than the previous year’s growth of 9.2 per cent. Wholesale and retail trade saw significant growth at 7.9 per cent in Abu Dhabi compared to 3.9 per cent at a national level. Despite a contraction in the oil and gas sector, Abu Dhabi’s overall GDP growth slowed to 3.1 per cent in 2023. The UAE’s economy grew by 3.6 per cent last year, with the non-oil sector outperforming expectations with a growth rate of 6.2 per cent.
Financial services emerged as the fastest-growing sector in 2023, expanding by 14.3 per cent year-on-year, followed by transport and logistics at 11.5 per cent. Construction and real estate services also showed positive growth. Overall, the UAE’s economic outlook remains positive with continued investments in infrastructure and public sector projects driving non-oil GDP growth despite potential challenges in private sector investment. As the country navigates through global economic fluctuations, the Emirates NBD report presents a comprehensive analysis of the key sectors contributing to the UAE’s economic growth in the coming years.
