The UAE’s non-oil sector will remain robust and continue to support economic growth in 2024, expanding at 3.2 percent, due to strong performance in tourism, real estate, construction, transportation, and manufacturing sectors. According to the Spring 2024 Gulf Economic Update (GEU) by the World Bank, the UAE’s oil output growth should reach 5.8 percent in 2024.
GDP to grow 3.9 percent
The report also expects the country’s real gross domestic product (GDP) growth to accelerate to 3.9 percent in 2024 with an increase in OPEC+’s oil production in the second half of 2024 and a recovery in global economic activity.
The World Bank explained that the UAE maintained a strong current account surplus of 9.1 percent of GDP due to the rise in its non-oil sector, particularly in its non-oil exports in tourism and commercial services, investments, and trade agreements with key Asian and African markets.
The report highlighted the strength of financial reserves in most GCC countries in 2023, stating that the UAE recorded significant growth last year. Hence, the substantial improvement in the external balances of GCC countries over the past decade, primarily driven by the oil and gas sector and the expansion of non-oil exports, has kept financial reserves at comfortable levels.
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Economic diversification efforts surge
In line with its goal of growing its non-oil sector, the World Bank also revealed that the UAE approved a $10 billion investment in tourism infrastructure and initiated the establishment of a large public-private partnership portfolio worth $10.9 billion. In addition, the country is actively pursuing a series of structural measures and strategic investments to diversify its economy and enhance industrial capabilities.
Some strategic initiatives include:
- Abu Dhabi’s $10 billion investment in tourism infrastructure
- ADNOC Gas’s $13 billion gas expansion plan both globally and locally over the next five years
- Approval of a large public-private partnership portfolio worth $10.9 billion in Dubai
In addition, the country’s employment recovered to pre-pandemic levels while investments in its Emiratization strategy grew with a new budget of $1.74 billion that aims to integrate 36,000 citizens into the private sector by 2024.
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