In a promising outlook for the United Arab Emirates (UAE), the World Bank has projected a robust growth of 4.1% in the country’s Gross Domestic Product (GDP) for the year 2023. This forecast surpasses the recent estimate of 3.9% put forth by the UAE Central Bank in its Quarterly Economic Review. Essam Abu Suleiman, the World Bank Regional Director for the Gulf Cooperation Council (GCC), shared this optimistic projection during an interview with WAM, emphasizing the significant contribution of the non-oil sector to the UAE’s economic recovery.
“Despite the challenging global economic conditions, our estimates suggest that the UAE economy will experience a growth of about 4.1% next year, primarily driven by the robust recovery of the non-oil economy,” stated Abu Suleiman.
The anticipated economic expansion is expected to find support in the resurgence of the UAE’s oil exports and a recovery in demand across non-oil sectors. Additionally, the country’s favorable business climate and well-developed infrastructure are poised to play pivotal roles in sustaining this growth momentum.
Abu Suleiman highlighted that the UAE is poised to witness increased revenues, propelled by a rise in oil income and the recovery of non-oil sectors. These factors are anticipated to result in a fiscal surplus of approximately 4.4% of GDP in 2022. The World Bank official also drew attention to recent bilateral free-trade agreements inked by the UAE, coupled with the strength of oil exports, contributing to an expected current account surplus of 11.2% of GDP.
Notably, the upbeat forecast from the World Bank contrasts with the UAE Central Bank’s previous projection of 7.6% GDP growth for the current year, reflecting an upward revision from the initial estimate of 6.5%. The Central Bank attributes this revision to the strong performance of key non-oil sectors such as tourism, hospitality, real estate, transportation, and manufacturing.
The regulator specifically anticipates a noteworthy growth of 6.1% in non-oil GDP for 2022, surpassing its earlier estimate of 4.3%. Meanwhile, the oil GDP is projected to witness an impressive growth of 11% during the same period.
In summary, the UAE appears to be on a trajectory of economic resilience and growth, with the World Bank’s optimistic forecast for 2023 underscoring the nation’s ability to navigate global economic challenges and leverage the strength of both its oil and non-oil sectors. As the country continues to foster a favorable business environment and engage in strategic trade agreements, the stage is set for a dynamic economic landscape in the years ahead.
