The emirate’s economy achieved robust growth rates, thanks to the strategic frameworks adopted by Abu Dhabi aimed at promoting economic diversification….reports Asian Lite News
The Statistics Centre – Abu Dhabi (SCAD) has issued preliminary statistical estimates of the Gross Domestic Product (GDP), revealing a strong performance of the non-oil economy, which recorded a remarkable growth of 9.1 percent, and 3.1 percent growth of Abu Dhabi’s real GDP during 2023 compared to 2022.
The results demonstrate the economy’s ability to expand amidst the growth of the non-oil economy at impressive rates, making significant strides in the “construction”, “finance and insurance”, and “transportation and storage” economic activities, and contributing over 53 percent to the total GDP.
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During Q4-2023, Abu Dhabi’s economy grew 4.1 percent compared to the same period in 2022, showing continued growth driven by the expansion of non-oil sectors, which achieved 10.4 percent during the same period.
The emirate’s economy achieved robust growth rates, thanks to the strategic frameworks adopted by Abu Dhabi aimed at promoting economic diversification. This is evident in the development of the industrial, finance, and tourism sectors, the encouragement of foreign investment, and the private sector to provide new job opportunities. This is proven by the strong performance of the non-oil economy, which recorded 9.1 percent and 9.2 percent during 2023 and 2022, respectively.
The emirate’s gross domestic product (GDP) in 2023 achieved its best performance in terms of value in ten years at AED1.14 trillion, despite challenges and global market fluctuations that affect all sectors and geographies in the world. This reflected the success of the strategic policies taken by Abu Dhabi to enhance economic diversification, innovation, and entrepreneurship.
Ahmed Jasim Al Zaabi, Chairman of the Abu Dhabi Department of Economic Development (ADDED), said, “The impressive performance of our ‘Falcon Economy’ during the past few years proved the effectiveness of Abu Dhabi’s proactive approach to addressing the ever-changing dynamics of the global economy. As evidenced by the exceptional growth of targeted sectors and clusters resulting in a 9.1 percent rise in non-oil sectors and 3.1 percent of real total GDP in 2023 compared to 2022’s growth rate which was the highest in the Middle East and North Africa (MENA) region, Abu Dhabi has reaffirmed its status as a leading, innovative economic powerhouse and magnet for talents, businesses, and quality investments”.
Al Zaabi further explained, “Guided by the wise leadership’s vision, our ‘Economic Diversification 2.0’ is building on these solid foundations to guide the transformative journey towards a smart, inclusive, and sustainable development. We are delivering the ambitious objectives of our multi-polar socio-economic strategy to transform and accelerate the growth by leveraging advanced technologies, innovation, and entrepreneurial ecosystem to enable all to reach their full potential in Abu Dhabi, the Capital of Capital, and expand globally.”
Abdulla Gharib Alqemzi, Acting Director-General of the Statistics Centre – Abu Dhabi, stated, “The strong performance of Abu Dhabi’s economy in 2023 demonstrates the success of its strategic efforts towards diversification and innovation, moving with confident steps to enhance this growth by giving priority to talents, investors, and entrepreneurs who recognise the emirate in the global economy as an attractive destination.”
He added, “The statistical results indicated an expansion in the non-oil economic activities, as the contribution of the non-oil activities to the GDP reached more than 53 percent, thanks to the adoption of the incentive policies that enabled talent, entrepreneurs, and investors to make optimal use of business and investment opportunities in Abu Dhabi.”
Expansion of Key Sectors
Statistical estimates showed remarkable growth in construction activities by 13.1 percent in 2023 compared to 2022, with the added value of this sector reaching more than AED97 billion, the highest in ten years, while contributing 8.5 percent to the emirate’s gross domestic product during the same period. Also, the added value of manufacturing activities during 2023 was recorded at AED101 billion, representing 8.8 percent of the total gross domestic product, marking the largest non-oil contributor to overall GDP during this period compared to 2022.
The financial and insurance activities achieved the highest growth rate of 25.5 percent and their best performance in terms of value, at AED79 billion, with a contribution to the GDP exceeding 6.9 percent. This reflects the growing confidence of the international community in the emirate’s economy, consolidating its position as a preferred destination for investors and business owners.
This positive performance had an impact on wholesale and retail trade activities, which achieved a growth of 7.9 percent, with their added value reaching approximately AED63 billion during 2023 compared to 2022, with a contribution rate exceeding 5.5 percent to the emirate’s gross domestic product, according to the preliminary statistical results published by the Statistics Centre – Abu Dhabi.
Extended Growth
In a related context, transportation and storage activity achieved a remarkable growth of 17.1 percent during 2023 compared to 2022 according to statistical estimates. This activity includes all operations related to the transport of passengers and goods by land, sea, and air, handling and storage activities, and postal and support activities.
Health and education activities grew 5.5 percent during 2023 compared to 2022, while “information and communication” activities and “real estate activities” grew 5.8 percent during the same period. The growth rate of arts and recreation activities reached 7.8 percent during 2023, while accommodation and food services recorded a growth of 3.1 percent during the same period compared to 2022, reflecting Abu Dhabi’s success in attracting visitors and displaying its features as a global business centre and a major destination for events such as exhibitions and conferences.
‘UAE’s GDP to grow by 4.2% this year’
The Central Bank of the United Arab Emirates (CBUAE) expects the country’s Gross Domestic Product (GDP) to grow by 4.2 percent in 2024, rising to 5.2 percent in 2025, while maintaining its estimate for a 3.1 percent growth in 2023.
In its quarterly economic review report for the fourth quarter (Q4) of 2023, the Central Bank also forecasted a non-oil GDP growth of 4.7 percent in both 2024 and 2025, and an oil GDP growth of 2.9 percent in 2024 and 6.2 percent in 2025.
The Central Bank noted that the UAE’s consolidated fiscal balance for the first nine months of 2023 posted a surplus of AED61 billion, equivalent to 4.4 percent of GDP, with total revenues reaching around AED370 billion, while expenditures amounted to about AED309 billion.
The CBUAE report anticipated that the recent introduction of a federal corporate tax is poised to further strengthen government finances, contributing to the diversification of revenue sources away from the oil sector.
The report also pointed out the continued strength of the non-oil private sector, showing signs of robust economic activity, with the Purchasing Managers’ Index (PMI) reaching 56.6 in January 2024, driven by ongoing business confidence in economic outlooks. This optimism is based on expectations of sustained demand and sales, expected to support continuous expansion in production, along with the possibility of new projects and increased investment.
The report highlighted that the PMI in Dubai reached 56.6 last January, indicating sustainable growth in the emirate’s non-oil private sector.
According to the CBUAE report, positive readings regarding employment and wage growth indicate strong future consumption. The number of employees in the private sector, measured by the 3-month moving average, increased by 3.1 percent in the fourth quarter of last year. The 3-month moving average of wages in the same quarter increased by 7.4 percent compared to the same period in 2022, enhancing individuals’ purchasing power.
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