DUBAI: The United Arab Emirates’ gross domestic product grew 3.7% in the first half of the year, the economy minister said on Wednesday, as non-oil sector growth vastly outperformed overall growth.
Non-oil growth surged 5.9% in the first six months of the year, Abdulla bin Touq Al Marri said, speaking at a business conference in Dubai.
“The UAE’s economic growth is a testament to our resilience, diversification and commitment to openness, and international cooperation,” he said, adding the country was becoming less reliant on oil and more dependent on knowledge-based industries.
The non-oil sector accounts for more than 70% of the country’s GDP.
The Gulf states, largely dependent on hydrocarbons for revenue, all have plans under way to diversify their economies and sources of income, and pull in foreign investment.
The UAE is among the most advanced in that process, having developed sectors such as financial services, trade and tourism as well as implementing social and business reforms.
Last year, the UAE economy grew 7.9% in real terms, boosted by an oil price windfall as well as a swift economic rebound in tourism and trade post the COVID pandemic, especially in Dubai, the regional business and tourism hub.
But growth is expected to slow sharply across the region in 2023 as oil production cuts for OPEC+ members, lower oil prices, and global economic headwinds weigh.
The International Monetary Fund forecasts overall GDP growth of 3.5% for the UAE this year, outperforming the wider GCC region, with non-hydrocarbon growth to exceed 4%.
But it cautioned in a report that the outlook “remains subject to heightened global uncertainty”.
“A decline in oil demand and reduced global trade and tourism from slower global growth, higher-for-longer interest rates, tighter financial conditions, or geopolitical developments would weigh on growth and pressure fiscal and external balances,” the report, dated Oct. 16, said.
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