The Central Bank of the UAE (CBUAE) maintained its real GDP growth projections for 2024 at 4.0 per cent, accelerating to 4.5 and 5.5 per cent in 2025 and 2026, respectively.
The growth expectations for the current year are driven by growth in the tourism, transportation, financial and insurance services, construction and real estate, as well as communication sectors, according to the Quarterly Economic Review – December 2024 by the apex bank.
Non-oil GDP growth accelerated to 4.8 per cent year-on-year (YoY) in Q2 2024, up from 4 per cent YoY in the previous quarter, mainly due to the faster growth in manufacturing, trade, transportation and storage, and real estate activities, the report said.
Non-oil GDP growth is expected to remain strong at 4.9 per cent in 2024 and 5.0 per cent in 2025, resulting mainly from the strategic plans and policies implemented by the government to attract foreign investments and promote economic diversification.
Wholesale and retail trade, manufacturing and construction continued to be some of the backbones of the growth in the non-oil sector.
The manufacturing sector continued to attract more FDI, expanding in line with the different Emirates’ and Federal strategies.
The first nine months of 2024 also saw strong growth in the construction sector.
The comprehensive economic partnership agreements (CEPA) signed by the UAE with many countries have also strengthened its trade partnerships.
As a result, the UAE’s non-oil trade exceeded AED 1.3 trillion in H1 2024, equivalent to 134 per cent of the country’s GDP, representing a 10.6 per cent YoY increase, and reflecting a successful implementation of the plan to diversify the UAE economy and strengthen ties with key trading partners.
In the first 10 months of 2024, oil production averaged 2.9 million barrels per day, and is expected to grow by 1.3 percent in 2024, accelerating to 2.9 percent in 2025.
The UAE fiscal sector performance during the first half of 2024 remained robust, with notable improvements in government revenue and fiscal surplus compared to the same period in 2023. The fiscal surplus reached AED 65.7 billion, equivalent to 6.7 per cent of GDP, representing a 38.8 per cent increase from AED 47.4 billion (5.1 per cent of GDP) recorded in H1 2023.
General government revenue in H1 2024 rose by 6.9 per cent YoY to AED 263.9 billion, or 26.9 per cent of GDP, driven by a substantial 22.4 per cent YoY increase in tax revenues, while the government capital expenditure surged by 51.7 per cent YoY to AED 11 billion in the first half of 2024.
The number of employees covered by the CBUAE Wages Protection System (WPS) increased by 4 per cent YoY in September 2024, while the average employee salary increased by 7.2 per cent YoY.
These indicators of employment and wage growth point to robust domestic consumption and sustainable GDP growth going forward, the report said.
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