The UAE economy will grow three per cent in 2023 and 4 per cent in 2024, according to S&P.
The economic growth will be driven by the non-oil sector, which is expected to benefit from strong growth in tourism, government initiatives, and technological advancements, said the credit rating agency.
Analysts pointed to the UAE’s comprehensive implementation of economic and social initiatives over the past few years. These initiatives are strategically designed to set the stage for sustained, long-term economic expansion.
S&P analysts anticipate continued growth within the UAE’s robust tourism sector.
The country’s ability to host major international events is expected to play a pivotal role in achieving the UAE’s ambitious goal of attracting 40m visitors by 2030, accompanied by plans to expand the number of hotel rooms to 250,000 during the same period.
Analysts expect the UAE banking sector to remain robust, with profitability improving beyond pre-pandemic levels due to rising interest rates. The Dubai real estate sector is also expected to become more flexible, with stable housing prices supported by strong demand.
Trevor Cullinan, sovereign ratings analyst at S&P, said that the UAE economy is expected to grow by 3 per cent in 2023, driven by the non-oil sector. He added that the economy is expected to grow by 4 per cent in 2024, supported by both the oil and non-oil sectors.
Cullinan highlighted the key contributors to the country’s economic growth, including oil and gas, wholesale trade, industry, real estate, construction, financial services, and tourism.
He expects that the non-oil economy will be bolstered by inflows of expatriates and tourists, as well as positive sentiment from investors, consumers, and the private sector.
This is in line with the “We Are the Emirates 2031” vision, which aims to increase trade volume and the tourism share of GDP through cooperation between government agencies, institutions, and the private sector to advance the development process.
Cullinan pointed out that the UAE government has implemented a wide range of commercial and social initiatives over the past few years that are expected to drive long-term economic growth.