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UAE Central Bank Expects Real GDP Growth to Reach 4.2% in 2023

UAE Central Bank Expects Real GDP Growth to Reach 4.2% in 2023
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UAE Central Bank Expects Real GDP Growth to Reach 4.2% in 2023

UAE Central Bank Expects Real GDP Growth to Reach 4.2% in 2023

The United Arab Emirates' central bank said on Wednesday it expects real GDP growth to reach 4.2 percent next year, up from its earlier forecast of 3.3 percent.

The central bank estimated the non-oil GDP growth to reach 3.9 percent in 2023 compared with previous estimates of 3.3 percent, while the oil GDP growth to reach five percent in 2023 compared with earlier estimates of 3.4 percent.

The bank had projected real GDP growth to reach 5.4 percent in 2022 after the growth jumped to 3.8 percent in 2021.

According to the estimates of the central bank, the non-oil GDP growth rose 5.3 percent in 2021, and is expected to reach 4.3 percent in 2022 in light of sustainable government spending, a positive outlook for loan growth, and the improvement in business sentiment.

The oil GDP growth is anticipated to grow 8 percent in 2022, due to the expected recovery in global demand, as well as the recovery of the transport and travel sector, and production increase of OPEC member countries.

On the other hand, the bank’s statistics showed that credit facilities granted by national banks to the business and industry sectors in the country rose by 2.6 billion dirhams ($707 million) in two months.

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Saudi Transport, Logistics Sector Set for 10% Growth in Q2

An investor monitors a trading screen at the Saudi financial market in Riyadh. (AFP)
An investor monitors a trading screen at the Saudi financial market in Riyadh. (AFP)
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Saudi Transport, Logistics Sector Set for 10% Growth in Q2

An investor monitors a trading screen at the Saudi financial market in Riyadh. (AFP)
An investor monitors a trading screen at the Saudi financial market in Riyadh. (AFP)

As Saudi companies start reporting their Q2 financial results, experts are optimistic about the transport and logistics sector. They expect a 10% annual growth, with total net profits reaching around SAR 900 million ($240 million), driven by tourism and an economic corridor project.

In Q1, the seven listed transport and logistics companies in Saudi Arabia showed positive results, with combined profits increasing by 5.8% to SAR 818.7 million ($218 million) compared to the previous year.

Four companies reported profit growth, while three saw declines, including two with losses, according to Arbah Capital.

Al Rajhi Capital projects significant gains for Q2 compared to last year: Lumi Rental’s profits are expected to rise by 31% to SAR 65 million, SAL’s by 76% to SAR 192 million, and Theeb’s by 23% to SAR 37 million.

On the other hand, Aljazira Capital predicts a 13% decrease in Lumi Rental’s net profit to SAR 43 million, despite a 44% rise in revenue. This is due to higher operational costs post-IPO.

SAL’s annual profit is expected to grow by 76% to SAR 191.6 million, driven by a 29% increase in revenue and higher profit margins.

Aljazira Capital also expects a 2.8% drop in the sector’s net profit from Q1 due to lower profits for SAL and Seera, caused by reduced revenue and profit margins.

Mohammad Al Farraj, Head of Asset Management at Arbah Capital, told Asharq Al-Awsat that the sector’s continued profit growth is supported by seasonal factors like summer travel and higher demand for transport services.

He predicts Q2 profits will reach around SAR 900 million ($240 million), up 10% from Q1.

Al Farraj highlighted that the India-Middle East-Europe Economic Corridor (IMEC), linking India with the GCC and Europe, is expected to boost sector growth by improving trade and transport connections.

However, he warned that companies may still face challenges, including rising costs and workforce shortages.