The Central Bank of the UAE has maintained its growth forecast for the national economy unchanged at 4.3% for 2024.
In its quarterly economic review, the bank said that the UAE economy continued to grow at a solid pace in Q1 2023, “reflecting a strong performance of the non-oil sector”.
For 2024, the CBUAE projects the real non-oil GDP to expand by 4.6%, and the oil GDP by 3.5%.
For 2023, growth is expected to reach 3.3%.
“The CBUAE revised its non-oil GDP growth upwards for 2023 to 4.5%, mainly due to an acceleration of private and public investment in the remainder of the year. Travel and tourism are expected to further accelerate.”
The private sector continues to show strong dynamism, benefiting from multiple reforms to increase FDI inflows and attract top talent.
“The UAE’s PMI signaled expansion in the non-oil private sector for the 28th consecutive month, reaching 55.9 in March 2023 and averaging 55.3 in 2022,” said the report on the country's Purchasing Managers Index.
“New business growth was the quickest since October last year, encouraging firms to purchase inputs at the strongest rate in five years.”
The Dubai PMI pointed to an uplift in growth momentum at the end of the first quarter of 2023, as firms broadened capacity to support an expansion in output. This was reflected in stronger increases in both jobs and inventories, with growth rates reaching multi-year records.
Domestic consumption also performed well during Q1 2023, supported by the significant rise in employment.
The 3-month moving average of people employed in the UAE and wages paid in the private sector recorded a double-digit increase Y-o-Y in Q1 2023, with levels and growth higher than their pre-COVID levels.
The PMI survey also signaled a thriving labor market in the non-oil private sector in March, with accelerating new order growth which led to the fastest increase in employment since July 2016.
“The banking sector continued to support investment in the private sector, as credit to the private sector increased by 5.9% Y-o-Y in Q1 2023,” it added.
Dubai welcomed 4.7 million visitors in the first quarter of 2023, an increase of 700,000 visitors during the same period in 2022. Hotel guest figures in Abu Dhabi hit 1.2 million during Q1, an increase of 34%.
The UAE airports received as many as 31.8 million passengers in the first quarter of 2023, an increase of 11.5 million passengers from the same period in 2022, according to the report.
The size of cumulative investments in the UAE’s civil aviation sector exceeded 1 trillion dirhams ($272.2 billion), while the size of investments in the development and expansion of airports hit 85 billion dirhams ($23.1 billion) to accommodate over 300 million passengers annually.
As of 2022, the aviation sector in the UAE contributes, directly or indirectly, to about 14% of GDP, compared to 2-3% in major emerging markets and advanced economies.
