In 2024, the United Arab Emirates (UAE) is poised to achieve a significant milestone in its economic development, with a projected Gross Domestic Product (GDP) growth of 5.7%. This impressive figure underscores the nation’s successful efforts in diversifying its economy beyond the oil sector, focusing on robust growth in non-oil industries such as tourism, real estate, and transportation.
Noil Sector Contributions
The UAE’s commitment to reducing its reliance on oil revenues is evident in the substantial contributions from non-oil sectors. In the first quarter of 2024, the country’s real GDP reached AED 430 billion, marking a 3.4% increase compared to the same period in 2023. Notably, the non-oil GDP grew by 4% during this time, highlighting the effectiveness of diversification strategies.
Key contributors to this growth include the trade sector, which accounted for 16.5% of the non-oil GDP, followed by manufacturing at 15%, financial and insurance services at 12.5%, construction at 11.6%, and real estate at 7.6%. These sectors have been pivotal in driving the nation’s economic expansion.
Tourism and sportation
The tourism industry has emerged as a cornerstone of the UAE’s non-oil economy. Global events such as COP28, coupled with enhanced air connectivity through carriers like Emirates and Etihad Airways, have significantly boosted tourist inflows. The World Travel & Tourism Council (WTTC) projects that the UAE’s tourism sector will grow by 4.2% annually through 2025, reinforcing its status as a premier global destination.
In parallel, the transportation and storage sectors have demonstrated remarkable growth, achieving an 8.4% increase in the first half of 2024. This surge reflects the nation’s strategic investments in infrastructure and logistics, further solidifying its position as a global trade and transit hub.
Corporate Profit Surge in Dubai and Abu Dhabi
The UAE’s two major emirates, Dubai and Abu Dhabi, have reported significant increases in corporate profits, defying regional trends.
- Dubai: In the third quarter of 2024, companies in Dubai experienced a 5.4% year-on-year increase in net profits, totaling $6.0 billion. This growth was primarily driven by the banking, telecom, and real estate sectors, which collectively accounted for 87.7% of the aggregate earnings on the exchange during this period.
- Abu Dhabi: The emirate reported a 9.3% year-on-year increase in total net profits during the first nine months of 2024, reaching $25.2 billion. The banking sector saw a notable 20.6% rise in net profits, amounting to $2.5 billion in Q3 2024, while the energy sector posted an 18.6% increase, with net profits reaching $2.2 billion.
Future Outlook
Looking ahead, the UAE’s economic growth is expected to accelerate, with projections of 4.5% in 2025 and 5.5% in 2026. These optimistic forecasts are underpinned by the nation’s ongoing economic diversification policies, which aim to further reduce dependence on oil revenues. Non-oil GDP growth is anticipated to remain robust, expanding by 4.9% in 2024 and 5% in 2025. (arabnews.com)
The UAE’s deliberate and strategic shift towards a diversified economy has not only bolstered its resilience against global economic fluctuations but also positioned it for sustained prosperity in the years to come.