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UAE non-oil GDP grows on back of financial sector

By Pramod Kumar
The UAE’s real GDP reached AED430 billion in Q1 2024, recording an annual growth of 3.4 percent Wam
The UAE’s real GDP reached AED430 billion in Q1 2024, recording an annual growth of 3.4 percent

The UAE’s non-oil GDP grew by 4 percent year on year in the first quarter of 2024, driven by increased financial and insurance activities in the private sector.

This growth in the financial and insurance sector was supported by the significant increase in the local credit granted to the private sector, resulting in a 6 percent growth, the UAE state-run Wam news agency reported, citing Federal Competitiveness and Statistics Centre’s preliminary data.

The sector now accounts for nearly 8 percent of the Gulf state’s GDP.

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This month, AGBI reported that the UAE banking sector profits soared as higher-for-longer interest rates boosted margins and loan defaults remained low.

However, analysts predicted that imminent US interest rate cuts will squeeze profitability, despite the likelihood of reduced borrowing costs bolstering loan growth.

According to the data, transportation and storage activities expanded 7.3 percent, supported by a 14.7 percent year-on-year increase in airport traffic to 36.5 million passengers

Construction and building activities rose 6.2 percent, following several government-initiated development projects this year. This led to the government’s public capital expenditures jumping to AED4.8 billion ($1.3 billion).

The restaurant and hotel sector expanded by 4.6 percent year on year, boosted by a tourism surge. Dubai welcomed 10.62 million tourists in the first seven months of 2024, an 8 percent year-on-year increase. Abu Dhabi hotels also welcomed 2.87 million guests during the first half of 2024, a 19.5 percent year on year growth.

Overall, the UAE’s real GDP reached AED430 billion in Q1 2024, recording an annual growth of 3.4 percent.

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