UAE Economy Poised for Further Growth in 2nd half of 2024

The nation’s stable investment and economic environment continue to drive prosperity despite global economic uncertainties. Due to this, the UAE is poised for significant economic growth in the second half of this year.

Building on last year’s success, the UAE’s economy is expected to maintain positive growth rates across various macroeconomic indicators. In 2023, the GDP reached AED 1.68 trillion, marking a 3.6% increase. Additionally, the non-oil GDP at constant prices grew by 6.2%, totaling AED 1.25 trillion, positioning the UAE fifth globally in the real GDP growth index.

The World Bank projects a 3.9% GDP growth for the UAE, with an increase to 4.1% in 2025. Similarly, the International Monetary Fund (IMF) forecasts a 4% growth in 2024, driven by activity in tourism, construction, manufacturing, and financial services.

Expert Insights on Economic Momentum

Dr. Karim El Solh, Co-Founder and CEO of Gulf Capital, emphasised the UAE’s upward economic trajectory, fueled by strong momentum over the past two years. He praised the UAE government’s proactive measures, including stimulus packages, foreign investment incentives, and efforts to improve business ease amid global challenges.

In a statement to the Emirates News Agency (WAM), Dr. El Solh highlighted the UAE’s strategic location, robust infrastructure, and business-friendly policies as key factors attracting investors and fostering growth. He pointed out that the UAE’s Vision 2030 framework and forward-looking economic policy, focusing on diversification, innovation, and sustainability, have garnered international acclaim. This has boosted confidence in the national economy, resulting in increased foreign investment, improved credit ratings, and enhanced global competitiveness.

Sector-Specific Growth and Investments

Damian Hitchen, CEO of Saxo Bank in the Middle East and North Africa, expects the UAE’s economy to grow by over 4% in 2024. He attributes this growth to OPEC’s increased oil production quota and momentum in non-oil sectors. Hitchen pointed to the UAE’s record $23 billion in foreign direct investment in 2022 as evidence of its attractiveness, along with its ranking of 14th globally in attracting professional talent, according to the Boston Consulting Group. He also highlighted the crucial roles of the tourism and aviation sectors in boosting the economy, enhancing trade, and transforming the UAE into a global transportation and logistics hub.

Outlook for Future Growth

Vijay Valecha, Chief Investment Officer at Century Financial, anticipates the UAE’s economy will sustain growth exceeding 4% this year, supported by strong performances in non-oil sectors. Valecha emphasised the importance of economic diversification away from oil, focusing on sectors such as renewable energy, technology, financial services, tourism, construction, and real estate. These sectors collectively drive over 70% of the UAE’s GDP. He predicts the UAE will lead the Gulf and Arab countries in economic performance in 2024, thanks to strategic initiatives and forward-looking policies.

In summary, the UAE’s economic outlook remains strong, supported by strategic government policies, diverse growth sectors, and foreign investment.

Original article reference: Gulf News.

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