As we hit the halfway mark of 2024, the UAE is powering ahead as an economic frontrunner, driven by relentless innovation, strategic investment, proactive policies and expansive growth across key sectors. In 2023, the country’s GDP soared to Dh1.68 trillion, showing a growth rate of 3.6 percent. This strong momentum has continued into 2024, with favourable trends seen across all key economic indicators. The UAE economy has shown remarkable resilience and growth potential amidst global uncertainties. The national economy is expected to grow by 4 percent in 2024 lead by strong activities in sectors like tourism, construction, manufacturing and finance. Clearly, the UAE isn’t just keeping up—it’s leading the charge in the global economic landscape.
The Current Economic Landscape
GDP Growth: Achieved 3.6% growth in 2023, with forecasts indicating further growth in 2024. The Central Bank of the UAE (CBUAE) initially projected a 4.2% economic growth for 2024 but revised it down to 3.9%, indicating a slight slowdown expected. Looking to 2025, they foresee a substantial acceleration in growth to 6.2%, driven by increased oil production and ongoing expansion in non-oil sectors.
Key Sector Contributions to the UAE Economy
1) Oil Sector: the UAE’s oil and gas sector, constituting 40% of the GDP, will continue to serve as a critical economic pillar. The country aims to ramp up oil production to 5 million barrels per day by 2027 to meet global energy needs, with a projected growth in oil output of 5.8% expected in 2024.
2) Non-Oil Sector– The UAE’s non-oil GDP, adjusted for inflation, reached Dh1.25 trillion, marking a 6.2% growth rate by the end of first half. This places the country fifth globally in terms of real GDP growth (according to the 2023 ranking).
-Tourism
Leading tourists’ destination: The UAE is a top tourist destination in the Middle East, contributing Dhs220 billion to its GDP in 2023, representing 11.7% of its economy. Ranked 18th globally in the World Economic Forum’s Travel & Tourism Development Index (TTDI), the UAE stands first in the MENA region.
The UAE expects tourism to contribute Dh236 billion to its economy in 2024, with plans to reach Dh450 billion by 2031 under the National Tourism Strategy 2031. This initiative aims to elevate the UAE as a premier global tourism destination in the coming decade.
-Financial Sector
The financial sector significantly boosted the UAE’s GDP last year, with total assets exceeding AED 4 trillion, marking an 11.1 percent growth. Banking, amid ongoing digital transformation, remained a pillar of strength, demonstrating robust fundamentals through strong capitalisation, profitability, and ample liquidity.
Diversification from Oil Dependence: The finance sector actively encourages diversification away from oil-dependent revenues, thus promoting a more resilient and sustainable economy.
Regulatory stability: The UAE’s Central Bank and regulatory bodies maintain a stable financial environment with effective regulations, fostering investor confidence, attracting foreign investment, and ensuring financial stability.
-Aviation
The aviation sector plays a crucial role in boosting the UAE’s economy by enhancing tourism, trade, and investment flows, both domestic and international. The UAE civil aviation sector soared in the first quarter of 2024, boasting a remarkable 14.7% increase compared to the corresponding period last year.
As a global hub, it facilitates seamless connectivity, supporting the nation’s economic ambitions. Additionally, the sector’s capabilities in areas such as engine maintenance, financing, leasing, air traffic management, and airport security contribute significantly to overall economic growth.
Dubai and Abu Dhabi, as two of the most powerful emirates in the UAE, equally contribute to the country’s economy. Dubai leads the UAE in greenfield FDI projects, hosting a substantial 81% of the country’s new investments in this category. Meanwhile, Abu Dhabi has risen as the MENA region’s fastest-growing startup hub, enhancing its ecosystem value by 28%. These achievements not only attract global investments but also stimulate local innovation, significantly bolstering the UAE’s economic influence on a global scale.
The UAE has risen to the top 10 globally in several GDP-related competitiveness indicators, achieving sixth place in the GNI Index of the UNDP’s 2024 Human Development Index Report. Economic diversification remains pivotal for reducing reliance on oil revenue, leveraging significant contributions from non-oil GDP and successful Foreign Direct Investment.
As we enter the next phase, the UAE is set to take the lead with its strong non-oil sector, strategic investments, and smart initiatives driving stability and innovation. Positioned for regional and global prominence, the nation sets a compelling example of economic resilience and forward-thinking leadership.