The past few years have seen Abu Dhabi, the capital of the United Arab Emirates (UAE), expansion as a regional and global economic hub. This narrative has been fittingly labeled the rise of the “Falcon Economy.”
Abu Dhabi’s economic growth
The concept was introduced during the inaugural edition of Abu Dhabi Finance Week (ADFW), a flagship event hosted by the capital’s international financial center, the Abu Dhabi Global Market (ADGM).
More than just a moniker, the Falcon Economy embodies the UAE capital’s commitment to economic growth, underpinned by a strategy that withstands fluctuations in global markets.
According to preliminary estimates by the Statistics Center – Abu Dhabi, the capital’s GDP reached a new record to surpass AED 297 billion during the first half of 2024, driven by the ongoing growth of the non-oil economy, which expanded 5.7 per cent. This pushed growth in the overall economy to 3.7 per cent compared to the first half of 2023.The share of the non-oil sector in the second quarter (Q2) 2024 grew to over 55.2 per cent of the capital’s economy, reaching its highest level since 2014.
Commenting on these record-breaking figures, H.E. Ahmed Jasim Al Zaabi, chairman of ADGM and the Abu Dhabi Department of Economic Development (ADDED), said, “The continued strong performance of our economy over the past years is a testament to its resilience and agility in responding positively and timely to mega shifts in the global economy as we are accelerating the transition to diversified, smart, and sustainable economy.”
Diversification in action
Abu Dhabi’s commitment to diversifying its economy was evident in its strong performance across multiple sectors, during the second quarter (Q2) 2024.
Specifically, manufacturing activities expanded by 2.6 percent, adding AED26.8 billion to the GDP and accounting for 9 percent of the total. The finance and insurance sector also excelled, growing by 13.4 percent to a high of AED22 billion, representing 7.4 percent of the GDP. Similarly, the wholesale and retail trade sector increased by 3.3 percent, reaching a value of AED16 billion and contributing 5.5 percent to the GDP.
Furthermore, the transportation and storage sector recorded an impressive growth of 15.2 percent, while the real estate sector grew by 5.5 percent, with their contributions reaching AED7 billion and AED10 billion, respectively. These sectors contributed by 2.4 percent and 3.4 percent respectively to the GDP. The information and communication sector also reported significant growth, rising by 4.4 percent to a record AED8.5 billion and contribute by 2.8 percent to the GDP.
A visionary leader
Although boosting its economy across multiple sectors is a priority for Abu Dhabi, the UAE capital as a Falcon Economy is also about positioning itself as a visionary and global economic leader.
During Abu Dhabi’s participation in the 54th Annual Meeting of the World Economic Forum (WEF), Al Zaabi remarked, “Our soaring Falcon Economy presents a model of harmonizing between advanced technologies, sustainability, human development, and economic growth.”
“Our initiatives to further enhance a vibrant, globally competitive, and entrepreneurial ecosystem to generate opportunities for all, enabling them to reach their full potential, are paying off. Foreign investments in Abu Dhabi witnessed a significant 9.7 percent increase, reaffirming the emirate’s attractiveness to investors and its rising position as Capital of Capital,” he added.
Furthermore, the robust activities within ADGM further exemplify Abu Dhabi’s dynamic economic environment and strategic positioning as a global investment destination.
Fastest-growing financial center
In H1 2024, ADGM reinforced its role as a pivotal force in the non-oil economy. As the fastest-growing financial center in the region and the only jurisdiction with the direct application of English Common Law, ADGM has been instrumental in advancing Abu Dhabi’s financial sector. The asset management sector within ADGM continues to thrive. AUM grew by a remarkable 226 percent in the first six months of the year compared to the same period last year. Simultaneously, the increased activity within ADGM is a key contributor to this success. By the end of June 2024, the number of operational entities in ADGM had surged to 2,088, which includes 231 financial services entities — a 31 percent increase from H1 2023. This growth was further underscored by a significant rise in the issuance of Financial Services Permissions (FSP), with 42 granted in just six months. This mirrors an increase of over 90 percent from the previous year.
Additionally, the issuance of new licenses saw a sharp increase, with 1,271 new licenses representing a 20.5 percent YoY rise.
Expanding horizons
These figures underline ADGM’s crucial contribution to the Falcon Economy and demonstrate the UAE capital’s growing influence as a global business hub.
In an effort to further extend its international reach, ADGM conducted a series of successful roadshows across multiple countries and regions, including the US, Europe, Hong Kong, and the Chinese subcontinent in H1 2024.
This proactive approach to engaging global markets highlights Abu Dhabi’s broader strategy to enhance its global economic presence.
As the world anticipates the third edition of Abu Dhabi Finance Week, from December 9 to 12, 2024, Abu Dhabi is poised once again to highlight the significant strides made in transforming its economy. This event will not only highlight the progress achieved but also unveil new strategies to fuel the continued rise of the Falcon Economy.
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