The UAE raises its economic growth expectations to 5.7% in 2024

Emirates Central Bank

The UAE Central Bank raised its forecast for the country’s GDP growth next year, 2024, to 5.7 percent, compared with the previous forecast of 4.3 percent.

The UAE’s overall GDP is expected to grow by 3.1 percent in 2023, the bank said in a report released on Thursday.

The central bank’s report expects non-oil GDP to grow by 5.9 percent in 2023 and 4.7 percent next year, while oil GDP growth is estimated at 8.1 percent in 2024.

The central bank explained that the UAE economy recorded an annual growth of 3.8 percent in the second quarter of this year, compared to 8 percent in the same quarter last year, in the first quarter of this year.

He said growth in non-oil gross domestic product increased to 7.3 percent year-on-year in the second quarter of this year, up from 4.5 percent year-on-year in the previous quarter and 6.4 percent year-on-year. During the same period last year.

In terms of non-oil sectors of the economy, the report indicated that financial services, insurance services, construction and wholesale and retail trade saw significant expansion, leading to a revision in the expected growth rate in 2023 and 2024. 5.9 percent and 4.7 percent respectively.

He said the consolidated fiscal balance in the first half of this year was 47.4 billion dirhams, or 5.2 percent of GDP on an annualized basis, with a surplus of 13.4 percent for the same period in 2022.

According to the report, government revenue in the first half of 2023 is 246.9 billion dirhams, or 26.4 percent of GDP on an annual basis, while total expenditures are 199.5 billion dirhams, or 21.3 percent of GDP on an annual basis. .

A report by the UAE Central Bank indicated that economic activity in the non-oil private sector continued to be very resilient, with the UAE Purchasing Managers’ Index rising to 57.7 in October, its highest level since June 2019, and an improvement in employment conditions. Driven by a sharp rise in both business activity and new orders; In particular, new export orders rose at the fastest pace in more than 4 years.

Purchasing managers’ index data generally pointed to stronger growth in the non-oil sector in the third quarter and last October, as firms remained optimistic about expectations for the next twelve months.

Dubai’s Purchasing Managers’ Index rose to its highest level since August 2022, reaching 57.4 in October, and the report pointed to a large increase in new orders, which expanded at the fastest pace since mid-2019. The increase in overall numbers, which bolstered business confidence, rose to its highest level in more than 3 years.

Employment in the private sector is expanding rapidly, in line with the resilience of economic activity, with the number of employees in the sector in September up 5.5 percent from a year ago, and total wages in the private sector rose 8.2 percent annually.

An influential purchasing managers’ survey indicated an increase in employment in the UAE to meet a strong increase in new orders at the end of the third quarter of this year and last October.