UAE maintains robust economic performance in non-oil sectors: OPEC

In its latest Monthly Oil Market Report (MOMR), the Organisation of the Petroleum Exporting Countries reported that the UAE economy continues to record improved performance, particularly in its non-oil sectors such as real estate, tourism and manufacturing.

OPEC noted that the housing, electricity, gas and other fuels sector – comprising more than 40% of the Consumer Price Index (CPI) – experienced a slight rise, reaching 6.7% year-on-year (YoY) in June, up from 6.6% in the month before.

Tourism sector significant contributor to UAE economy

Food and beverage inflation remained relatively stable. The UAE’s tourism sector also noted incredible performance. Dubai International (DXB) received a record 44.9 million guests in H1 2024, becoming a significant contributor to the emirate’s economy.

The Dubai airport is on track to handle a record 91.8 million passengers in 2024, higher than its forecast of 91 million in May, despite serious geopolitical issues raging globally. Supported by strong connectivity, DXB is playing a central role in Dubai’s economic performance.

Data from the Dubai Department of Economy and Tourism highlights 2023 as a record year for tourism in the emirate. The number of international visitors noted a stunning 19.4% increase from 2022, surpassing levels seen before the COVID pandemic.

Rapidly improving international economic relations

The UAE Central Bank recently signed currency exchange agreements involving Ethiopia, Indonesia and the Seychelles. These deals are designed to facilitate cross-border transactions and enhance payment system cooperation.

The Gulf state’s comprehensive economic partnership agreement (Cepa) programme is aimed at eliminating tariffs and boosting trade. It has further bolstered the country’s bilateral business and diplomatic ties and is expected to support economic diversification efforts.

The UAE’s robust economic policies and strategic international partnerships position the country to sustain its promising economic trajectory and continue diversifying its economy, reported Economy Middle East in a recent report.

Burgeoning manufacturing sector of UAE

In its June Monthly Oil Market Report, OPEC highlighted that the UAE continued to demonstrate rapid expansion in its non-oil sectors, recording a 6.7% expansion in the fourth quarter of 2023, up from 5.8% in the third quarter.

The latest report cited S&P Global’s PMI for the UAE that indicated that this ongoing economic performance, mainly in the manufacturing sector, is due to a 51% increase in the issuance of more industrial licences in 2023.