UAE central bank raises GDP growth outlook to 5.7% in 2024

The Central Bank of the UAE (CBUAE) said it expects the country’s gross domestic product (GDP) to grow by 5.7 per cent in 2024, compared to its previous projection of 4.3 per cent.

The apex lender projected that the country’s overall GDP will grow by 3.1 per cent in 2023.

The central bank forecasted a 4.7 per cent non-oil GDP growth in 2024 compared to 5.9 per cent this year while oil GDP is expected to expand by 8.1 per cent in 2024.

The UAE economy grew by 3.8 per cent year-on-year (YoY) in the second quarter of 2023, compared to 8 per cent recorded during the same period a year ago, aligning similarly with the first quarter of the current year.

The CBUAE said the non-oil GDP growth accelerated to 7.3 per cent YoY in the second quarter of the current year, up from 4.5 per cent YoY in the previous quarter and 6.4 per cent YoY compared to the same period last year.

CBUAE on non-oil economic growth

Regarding the non-oil sectors of the economy, the latest data from the CBUAE shows significant expansions in financial services, insurance, construction, wholesale, and retail trade, leading to an adjustment in the expected growth rate for 2023 and 2024 to 5.9 per cent and 4.7 per cent, respectively.

CBUAE said that the unified financial surplus during the first half of the current year amounted to Dhs47.4 bn or 5.2 per cent of the GDP, compared to a surplus of 13.4 per cent during the same period in 2022.

Government revenues reached Dhs246.9bn constituting 26.4 per cent of the GDP on an annual basis during the first half of 2023. Meanwhile, total expenditures amounted to Dhs199.5bn, accounting for 21.3 per cent of the GDP on an annual basis.

The UAE Purchasing Managers’ Index (PMI) soared to 57.7 in October, marking its highest level since June 2019.

The improvement in working conditions was propelled by a sharp rise in both business activity and new orders, particularly in new export orders, growing at the fastest pace in over four years.

The latest data from the central bank shows that companies remained optimistic about expectations over the next twelve months.

Similarly, the data also noted an uptick in Dubai’s PMI, which rose to its highest level since August 2022 to reach 57.4 in October.

The substantial increase in new orders, expanding at the fastest pace since mid-2019, was the primary driver for the overall increase, boosting business confidence to its highest level in over three years.

Read: UAE economy to grow by 3% in 2023, says S&P Global