CBUAE quarterly review: UAE economy to grow by 4.2% this year

The Central Bank of the United Arab Emirates (CBUAE) has released its quarterly economic review report for the fourth quarter of 2023, outlining optimistic growth forecasts for 2024 and highlighting key indicators shaping the country’s economic landscape, reported state news agency WAM.

Data released by the CBUAE maintains the country’s economic growth at 3.1 per cent for 2023.

Looking ahead, the banking authority expects the UAE’s Gross Domestic Product (GDP) to grow by 4.2 per cent in 2024 and 5.2 per cent in 2025.

Here are the key highlights from the CBUAE quarterly review:

Non-oil sector growth

The CBUAE review forecasts the non-oil GDP growth at 4.7 per cent for both 2024 and 2025 while oil GDP growth is estimated at 2.9 per cent in 2024 and 6.2 per cent in 2025.

Fiscal performance

The UAE’s consolidated fiscal balance for the first nine months of 2023 recorded a surplus of Dhs61bn, equivalent to 4.4 per cent of GDP. Total revenues reached approximately Dhs370bn, while expenditures amounted to about Dhs309bn.

Corporate Tax

Introduction of a federal corporate tax is expected to bolster government finances, contributing to revenue source diversification away from the oil sector.

Read: UAE announces new Corporate Tax registration deadlines: What businesses need to know

Non-oil private sector

Continued strength in the non-oil private sector is evident, with the Purchasing Managers’ Index (PMI) reaching 56.6 in January 2024. The review added that business confidence remains high, driven by expectations of sustained demand, sales growth, and expansion in production.

Dubai’s economic performance

Meanwhile, Dubai’s non-oil private sector PMI also reached 56.6 in January, indicating sustainable growth in the emirate’s economic activity.

Employment

Positive indicators regarding employment and wage growth suggest robust future consumption. Private sector employment increased by 3.1 per cent in Q4 of 2023, while the 3-month moving average of wages rose by 7.4 per cent compared to the same period in 2022.

The Central Bank’s report underscores the UAE’s resilience and positive economic trajectory, fueled by strong performance across various sectors and proactive fiscal policies aimed at sustaining growth and diversification.

Read: Abu Dhabi’s non-oil GDP expands over 9% in 2023