Abu Dhabi’s non-oil GDP grows 12% in second quarter

Reuters/Stringer

• Non-oil real GDP hits $42bn
• Highest quarterly figure since 2014
• Construction and manufacturing drive growth

Abu Dhabi’s non-oil economy hit a nine-year high in the second quarter of this year, driven by expansion in the construction, manufacturing and financial sectors.

Non-oil GDP in Q2 was up by more than 12 percent on the same quarter of 2022, contributing to a 3.5 percent year-on-year increase in total GDP, according to Statistics Centre Abu Dhabi.

The emirate’s non-oil real GDP stood at AED154 billion ($42 billion), up from AED146 billion in Q1 and the highest quarterly figure since 2014. Total real GDP was AED287 billion.

• Abu Dhabi’s industrial ambitions begin to bear fruit
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Non-oil activities’ contribution to GDP rose to 53.7 percent in Q2. In 2009, more than 85 percent of the UAE’s economy was based on oil exports.

An Opec+ agreement has led to a reduction in oil production and hydrocarbon receipts in recent months.

Ahmed Jasim Al Zaabi, chairman of the Abu Dhabi Department of Economic Development, said the non-oil figures demonstrated the “success of the emirate’s diversification strategy and adaptability to markets’ shifts”. 

He added: “Our comprehensive strategies, prudent policies, countercyclical measures and business-friendly ecosystem further enhance Abu Dhabi’s position as a rising economic powerhouse.”

The Statistics Centre Abu Dhabi estimates that the construction sector grew by 19 percent year on year in Q2. Its contribution to total GDP rose to almost 9 percent. Abu Dhabi reported a 363 percent rise in real estate deals with foreign buyers in the first half of 2023.

Manufacturing activity increased by 7 percent in the second quarter, taking its proportion of total GDP to 8.7 percent. It contributed more than 16 percent of non-oil GDP.

The growth follows the launch of the Abu Dhabi Industrial Strategy in 2022. The emirate recorded a 63 percent jump in industrial licences. 

The financial sector also reported significant growth in Q2, rising by nearly 30 percent as Abu Dhabi Global Market seeks to attract more hedge funds.

Brevan Howard, which has more than $33 billion in assets under management, moved to Abu Dhabi Global Market earlier this year.

Its first Middle East-based CEO, Oualid Lahsini, told AGBI last month that the company sees an “unprecedented” opportunity for growth in the region.