UAE GDP Growth to Double in 2024: Report
UAE GDP is expected to double in 2024 to 4.8 percent, up from 2.4 percent year-on-year in 2023, according to the latest Economic Insight report commissioned by ICAEW and compiled by Oxford Economics.
While near-term growth may face constraints due to OPEC+ production quotas, the UAE’s higher reference quota suggests a potential easing of these limitations in 2024.
The current forecast for the UAE’s oil production is 3.28 million barrels per day, 1.2 percent down on last year.
However, the UAE has consistently exceeded its OPEC target, maintaining around 3.25 million bpd recently.
This trend is expected to continue, with projections of an average output at 3.35m bpd in 2024, and a further increase to 3.6m bpd in 2025.
Though robust, this output remains significantly below the UAE’s maximum capacity of around 4.5m bpd.
The UAE has been actively pursuing non-oil sector expansion as part of its economic development plans.
The recent successful sovereign bond sale, which raised $1.5bn, has bolstered these efforts.
The country’s forthcoming integration into the BRICS block in January marks a significant milestone, enhancing trade and investment opportunities and supporting its diversification and growth strategy.
Logistics, technology, infrastructure, and finance sectors are expected to be among the key beneficiaries.
Non-oil GDP growth is forecast to ease moderately to 3.8 per cent in 2024, down slightly from 5.2 per cent this year.
The UAE’s GDP expanded by 3.7 per cent year-on-year in Q2, primarily driven by strong non-oil sector performance.
The Purchasing Managers’ Index (PMI) of 57.7 in October reached its highest for the UAE since the coronavirus pandemic, underscoring the resilience and continued growth of the non-oil economy.
Notably, credit growth in the UAE has trended up this year, diverging from regional patterns, with retail loans growing by nearly 10 per cent year-on-year. This is despite higher borrowing costs.
The UAE’s fiscal outlook is positive, with projected fiscal surpluses above 5 per cent of GDP in the near and medium term.
In 2022, the fiscal surplus exceeded 9 percent of GDP, the second highest in the region after Qatar.
This was driven by impressive revenue growth of 31.8 percent, largely the result of higher oil revenues.
This fiscal resilience has been further bolstered by the growth of the non-oil sector, providing a stable alternative revenue stream.
The United Arab Emirates is also making significant headway in green sukuk financing, allocating funds to sustainable projects and advancing its net-zero transition.
Post-COP28, the United Arab Emirates is expected to intensify efforts towards fulfilling its net-zero commitments.
