Economy

Emirates economy grows 3.7% in first half of year

October 30, 2023, 12:05 PM

Tourism and non-oil revenue boost growth
GDP growth expected to fall to 3.6%
Tourism earnings up 24%

The UAE economy grew 3.7 percent in real terms in the first half of the year, buoyed by strong tourism revenues and increased activity in other non-oil sectors.

“While this may seem modest, it represents a robust growth against a backdrop of global and regional uncertainty,” minister of economy Abdulla bin Touq Al Marri told the Alternative Investment Management (AIM) Summit in Dubai on Monday.

Al Marri said that the country’s non-oil sector grew by 5.9 percent in the first six months of the year.

GDP in the UAE grew 7.9 percent in 2022. Al Marri said he expected that to drop to 3.6 percent this year “mostly driven by the non-oil sector,” which contributes roughly 71 percent to the economy.

This is marginally up from the 3.4 percent predicted by the International Monetary Fund in its most recent forecast.

In a social media post earlier this year, UAE vice-president Sheikh Mohamed bin Rashid Al Maktoum said the country’s non-oil trade was likely to hit AED2.5 trillion ($680bn) by the end of this year and remains on track to achieve a goal of reaching AED4 trillion in 2031.

Inflation in the UAE stands at around 2 percent, with interest rates at 5.4 percent and forecast to remain at that level. Unemployment in the seven emirates is around 2.7 percent.

Al Marri said that the government has changed about 15 laws in the last two years “to show agility in our markets”. In November 2020, the UAE amended legislation to allow 100 percent ownership for foreign companies and reformed commercial transaction law to lift draconian controls on cheque writing.

The UAE has also signed seven comprehensive economic partnership agreements with partner countries. A further 20 are expected by the end of 2031.

Al Marri told the AIM Summit that tourism remains a “significant contributor” to GDP and has shown “remarkable resilience during these challenging times”.

He said that the UAE hosted 16 million hotel guests in the first seven months of this year, up 15 percent on the same period in 2022. This, he added, translated to revenues of $7 billion, up by 24 percent on last year.

Hotel occupancy reached 75 percent over this period.