Experts predict UAE economy to mark exceptional 2024 performance

UAE’s strategic vision is expected to fuel further economic expansion and attract more investments. In the second half of 2024, the Emirati economy is poised for further growth, achieving significant advancements and exceptional accomplishments.

The forecasted economic performance is a continuation of last year’s successes as the UAE observed positive growth rates across several macroeconomic indicators during the period. In 2023, the UAE’s GDP reached Dh1.68 trillion, growing by 3.6%.

The Gulf state has also been substantially focusing on economic diversification. In 2023, the UAE’s non-oil GDP at constant prices reached Dh1.25 trillion, growing by 6.2%, placing the national economy in the fifth position globally in terms of real GDP growth index.

UAE’s robust infrastructure and business-friendly policies

Dr Karim El Solh, Co-founder and CEO of Gulf Capital, believes the UAE economy is on a rising trajectory, supported by strong momentum over the past couple of years. He stressed that the Vision 2030 initiative has been boosting confidence in the national economy.

He commended the Emirati government’s proactive measures such as foreign investment incentives, stimulus packages and efforts to improve business ease as some of the key factors helping the UAE economy reach higher amid global economic challenges.

Dr El Solh highlighted the UAE’s strategic location, robust infrastructure and business-friendly policies as important reasons behind improved investor confidence in the economy, besides underscoring diversification, innovation and sustainability.

Economic diversification playing key role in UAE growth

The International Monetary Fund (IMF) expects the UAE economy to grow by 4% in 2024, supported by strong activity in tourism, construction, manufacturing and financial services. The World Bank forecasts a GDP growth of 3.9% in 2024 and 4.1% in 2025.

Damian Hitchen, CEO of Saxo Bank in the Mena region, also shared a similar outlook, expecting the Emirati economy to note a growth of 4% this year. OPEC’s increased oil production quota and momentum in non-oil sectors are likely to help.

Vijay Valecha, chief investment officer at Century Financial, expects the UAE economy to sustain robust growth exceeding 4%, supported by economic diversification through clean energy, technology, tourism, real estate, construction and financial services.

UAE a preferred global destination for foreign investors

Thanks to its strategic initiatives, the UAE noted a 35% surge in foreign direct investment inflows in 2023, despite global investment flows declining by 2%. The Gulf state jumped five places to rank 11th globally in terms of its ability to attract FDI.

Dr Thani Al Zeyoudi, UAE’s Minister of State for Foreign Trade, said: “The UAE is continuing to move in the right direction to strengthen its position as a preferred global destination for foreign investors … a haven for ambitious entrepreneurs and creative thinkers.”

The UAE offers a number of incentives to investors, supports entrepreneurship and facilitates the establishment of more companies to improve economic diversification. The country has a positive economic environment that lures more investments.