According to preliminary government figures, the economy of the United Arab Emirates (UAE) increased 4.3% year over year (YoY) in the fourth quarter of 2023, with non-oil economic growth significantly outpacing GDP growth overall.
The non-oil GDP increased by 6.7% during that time, the Federal Competitiveness and Statistics Centre said.
Among the industries with the fastest growth were finance and insurance, real estate, transportation and storage, and construction.
The Gulf State has also increased its investments in fields like cutting-edge technology and renewable energy.
As one of the top oil exporters in the world, the UAE has expedited plans to diversify its economy away from hydrocarbons and attract international investment; as a result, the GDP’s non-oil component currently accounts for more than 70% of the country’s overall growth.
Reuters projections project that real GDP growth will be 3.6% in 2023, with non-oil GDP growth coming in at 6.2% amidst a drop in oil activity due to reduced production and prices in 2023, which put pressure on all local producers of gas and oil.
In a recent statement, the International Monetary Fund (IMF) noted that the UAE’s economic growth was broad-based and supported by strong domestic activity in industries like financial services, tourism, and construction.
The Fund increased the 3.5% GDP growth estimate in its most recent Regional Economic Outlook report from April to 4% in its preliminary forecast for 2024.
IMF also found sustained domestic activity and comparatively high oil prices emerging as key factors in deciding the direction of UAE’s GDP growth. As per the global body, the Gulf nation is witnessing rapid growth in domestic industries like tourism, building, and finance services. And last but not the least, UAE’s inflation rate is predicted to be at 2% in 2024.
“The building, manufacturing, and financial services sectors of the UAE’s economy are growing at the fastest rates. The substantial growth in house prices and rent hikes is due in part to foreign demand for real estate, the UAE’s status as a safe haven, the improvement of bilateral and multilateral relations, and the ability to raise sufficient funds domestically,” Arab News reported further.
According to an April Reuters survey of analysts, the UAE will have the fastest GDP growth among Gulf countries in 2024, growing at a rate of 4%.
Analysts at Emirates NBD said in a research report that “the UAE’s economy has been impressively resilient despite both a dismal external backdrop as well as much higher interest rates in 2023.”