UAE's Non-Oil Sectors To Drive Robust Economic Growth In 2024: World Bank Report

The real gross domestic product (GDP) growth of the UAE is projected to accelerate to 3.9 percent in 2024, driven by OPEC+'s announced significant oil production hike in the second half of 2024 and a recovery in global economic activity. This information comes from the Spring 2024 Gulf Economic Update (GEU) issued by the World Bank.

The oil output growth is projected to reach 5.8 percent in 2024. Non-oil output will remain robust and continue to support economic growth, expanding at 3.2 percent. This growth is driven by strong performance in the tourism, real estate, construction, transportation, and manufacturing sectors.

The report stated that the UAE continued its strategic spending growth and supported development initiatives. It highlighted the country's commitment to sustainable, green, and digital growth. The UAE maintained a strong current account surplus of 9.1 percent of GDP, supported by rising non-oil exports in tourism and commercial services, enhanced new investments, and trade agreements with key Asian and African markets.

Financial Reserves and External Balances

The report highlighted the continued strength of financial reserves in most GCC countries in 2023. It noted that the UAE recorded significant growth throughout the year. The substantial improvement in the external balances of GCC countries over the past decade has kept financial reserves at comfortable levels. This improvement is primarily driven by the oil and gas sector and the expansion of non-oil exports.

Investment in Tourism Infrastructure

The UAE approved a US$10 billion investment in tourism infrastructure and initiated the establishment of a large public-private partnership portfolio worth US$10.9 billion. The report pointed out that the UAE is actively pursuing a series of structural measures and strategic investments to diversify its economy and enhance industrial capabilities.

Key Initiatives

Key initiatives include Abu Dhabi's US$10 billion investment in tourism infrastructure and ADNOC Gas's US$13 billion gas expansion plan both globally and locally over the next five years. Additionally, Dubai has approved a large public-private partnership portfolio worth US$10.9 billion.

Employment Recovery and Emiratisation Strategy

The report confirmed that the UAE also experienced a recovery in employment to pre-pandemic levels. Additionally, the Emiratisation strategy is being reinforced with a new budget of US$1.74 billion aimed at integrating 36,000 citizens into the private sector by 2024.

With inputs from WAM