The UAE’s economy has surely been on a roll in the last few months with multiple schemes, new principles in place, visa changes and upcoming IPOs, there’s quite a lot on the horizon for the country.
Not to mention, most of these economic changes and upgrades have been non-oil related, and now the economy is set to see an even bigger boost as the World Bank has predicted a 4.5% non-oil GDP rise in the UAE.
The World Bank's latest Gulf Economic Update has projected an impressive 3.4% growth in the UAE's real GDP for 2023, with a further boost to 3.7% in 2024. The primary driver of this growth is the anticipated 4.5% surge in the non-oil GDP sector, attributed to robust performances in tourism, real estate, construction, transportation, and manufacturing, along with increased capital expenditure.
Non-oil sectors are taking the lead
The report shared by the World Bank highlights the crucial role of non-oil sectors in the UAE's economy, contributing significantly to the nation's fiscal strength.
This is expected to grow by 3.9% in 2023 and 3.4% in the medium term, these sectors are also buoyed by sustained private consumption, strategic fixed investments, and an accommodative fiscal policy.
While the oil GDP is projected to experience a modest growth of 0.7% in 2023, this figure is expected to climb substantially to 3.6% in 2024. This underscores the dynamic nature of the UAE's economic diversification efforts and the positive impact it has on overall economic health.
The World Bank foresees an increase in the UAE's current account balance up to 12.4% in 2023, sustaining at 11.8% in 2024. Which is nearly a 1% rise, in less than a year!
Additionally, the fiscal balance is expected to achieve a surplus of 5.2% in 2023 and 4.6% in 2024, showcasing the resilience and stability of the nation's economic framework.
The Gulf Cooperation Council (GCC) region was estimated to grow by 1% in 2023, with a notable acceleration to 3.6% and 3.7% in 2024 and 2025, respectively. This growth is underpinned by the strength of non-oil sectors, expected to grow by 3.9% in 2023 and 3.4% in the medium term.
Of course, the ease of visas within GCC’s countries has also made it easier for the non-oil sectors to grow.
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Khaled Alhmoud, who is the Senior Economist at the World Bank, shared that the diversification and development of non-oil sectors have positively impacted job creation across various sectors and geographic regions within the GCC.
And with more economic changes underway, these can be boosted even further, especially the tourism sector.
The World Bank's optimistic forecast reflects the UAE's resilience, economic diversification success, and positive regional trends. As the nation continues to thrive, the future appears promising for both economic growth and societal advancements.
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