UAE a beacon for global investors

The Arab world’s second-largest economy registered an increase of 17 percent in non-oil trade in the first half of 2022 compared to a year earlier, valued at AED1.058 trillion ($288 billion). The contribution to non-oil GDP in 2021 was mainly driven by wholesale and retail trade (19 percent), manufacturing (12 percent), financial and insurance services (11 percent), construction (10 percent), and real estate (8 percent).

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Moreover, according to the UAE Central Bank, the UAE economy grew by 8.2 percent in the first quarter of 2022 with a forecast of 5.4 percent annual growth, followed by 4.2 percent in 2023. The UAE’s GDP measured by purchasing power parity (PPP) is expected to reach $779 billion in 2022 – and it’s just a matter of time before it hits $1 trillion.

Those figures not only showcase how the UAE has made a strong rebound from the Covid-induced global slowdown as business activity surges and tourism booms, but also demonstrate why the Gulf state has emerged as one of the world’s most prosperous countries with strong macroeconomic fundamentals and globally leading financial hubs.

Indeed, the UAE’s economic diversification is a well thought out strategic priority that stems not from a scarcity of oil and gas resources but from its political will to lead the region in leveraging the vast opportunities in tourism, foreign trade, hospitality and aviation to create robust economic growth.

In addition, the Barakah nuclear power plant which now supplies power to the UAE grid, the Mohammed Bin Rashid Al Maktoum Solar Park – the world’s largest single-site solar park – and the nascent hydrogen industry in the country, are evidence enough of the UAE’s focus on delivering clean energy solutions away from traditional fossil fuels.

The burgeoning financial services sector in the UAE has also soared to new heights of sophistication. Tailor-made financial regulatory systems at the Dubai International Financial Centre (DIFC) and the Abu Dhabi Global Market (ADGM) offer 100 percent foreign ownership without income tax implications.

Along with landmark residency reforms and a range of long-term investor visas, this has succeeded in attracting thousands of global professionals, overtaking other leading financial centers such as London, Singapore, and New York. This culture of innovation, creativity, and digitalisation forms the core of the UAE’s economic diversification, along with soft and hard infrastructure that attracts thousands of innovators and venture capital funds to the country.

Additionally, the establishment of the Dubai Virtual Assets Regulatory Authority (VARA) in 2021 is yet another indicator of the UAE’s ambitious goals to create advanced digital frameworks and protect investors in the virtual assets industry, thereby becoming the region’s blockchain industry hub.

It’s also IPO season in the Dubai Financial Market and the Abu Dhabi Exchange: DEWA raised $6 billion – the biggest IPO in the MENA region since 2019 – while the IPOs of Tecom, Salik, Bourouge and Abu Dhabi Ports have created a major buzz. DFM added more than 20,000 new investor accounts in the first seven months of 2022, surging by 287 percent from a year earlier and creating ample opportunities for local and foreign investors to be part of the phenomenal growth story.

Remarkably, this bullish sentiment prevails strongly in the UAE over the specter of global inflation and geopolitical turmoil, currency fluctuations and market volatility. In essence, the confidence in the UAE economy remains solid and investors appreciate the stability, easy regulations and smooth access to business in the country. As neighboring Saudi Arabia also embarks on economic expansions, this will only further boost the spirit of innovation, competitiveness, and easier access to business for investors in the UAE.