UAE central bank projects GDP growth rising to 4.3% in 2024

The Central Bank of the United Arab Emirates (CBUAE) has published its 4th Quarterly Economic Review.

The report projected the country’s annual real GDP growth will expand by 4.3 per cent in 2024.

The review stated: “After three-quarters of high growth, the UAE’s economy maintained a solid footing in Q4 2022, reflecting a strong performance of both the oil and the non-oil sectors.”

Central bank projections

“For the whole year, growth is estimated at 7.6 per cent. In 2023, the CBUAE maintains its forecast unchanged at 3.9 per cent. While oil production is expected to moderate in line with the OPEC+ agreements, the non-oil sector is expected to continue to support aggregate output, even if at a more modest pace,” the report said.

The central bank report further read: “Oil production averaged 3.1 million barrels per day in Q4 and the UAE hydrocarbon GDP is estimated to have grown by 10 per cent Y-o-Y, in line with the OPEC+ agreements (10.1 per cent for 2022).”

Read: UAE Central Bank projects real GDP to grow by 7.6 % in 2022

Non-oil trade growth

Following the robust growth in the previous quarter, the non-oil sector is estimated to have grown at a similar pace in Q4 2022. Non-oil GDP growth for 2022 was estimated at 6.6 per cent, the central bank report mentioned.

The central bank highlighted the main drivers of this strong performance to be the real estate and construction sectors and a robust manufacturing sector, such as refineries and aluminum production.

“In addition, the FIFA World Cup in Qatar and other global events that took place in the region boosted travel and tourism to the UAE,” added the review.

For 2023 and 2024, the central bank projects the real non-oil GDP to expand by 4.2 per cent and 4.6 per cent respectively –  in line with global growth trends.

Real GDP growth projected to expand by 4.3 percent in 2024: Central Bank#WamNews https://t.co/PCpCMunklA pic.twitter.com/RLq6JsMCRr

— WAM English (@WAMNEWS_ENG) March 27, 2023

Inflation drivers

The UAE’s consumer price index (CPI) increased by 4.6 per cent in Q4 2022, compared to 6.5 per cent in the previous quarter.

While the rise in inflation is in line with global trends, it is significantly below the global average. CPI inflation
averaged 4.8 per cent for 2022, close to the CBUAE forecast of 4.9 per cent.

The report further revealed: “In 2023, inflation is projected to decelerate to 3.2 per cent, on the back of softer price increases in all categories, especially transport and food and beverages. Imported inflation is expected to be modest owing to the disinflation trend worldwide, while rents and wages are also expected to contribute moderately.

“In 2024, inflation is projected to slow further at 2.8 per cent, in line with global trends.”

In recent news, the central banks of the UAE and India signed a memorandum of understanding (MoU) in Abu Dhabi on March 15.

The Central Bank of the UAE and Reserve Bank of India will collaborate on various emerging areas of fintech especially Central Bank Digital Currencies (CBDCs) and explore interoperability between the CBDCs of CBUAE and RBI, reported the state news agency, WAM.

Read: Central banks of UAE, India sign agreement to boost collaboration