The latest estimates presented by the UAE Central Bank show a 7.6% growth projection this year, the highest in 11 years, stirred by the sharp increase in oil revenue and the evident progress and improvement in the real non-oil gross domestic product.
This growth forecast is higher than the 5.4% estimate claimed by the Central Bank in July.
Minister of Economy Abdulla bin Touq said earlier this month that the UAE’s GDP is expected to grow by 6.5% this year.
“Overall real GDP continued to grow at a strong pace in the third quarter of 2022, after a robust increase in the first half of the year,” the Central Bank said in the report. “It was driven by a further rise in oil production, as well as significant improvement in the real non-oil GDP.”
In the upcoming year, the UAE economy is projected to grow by 3.9%, lower than the 4.2% forecast in the previous report.
In 2021, the UAE economy bounced back from the repercussions of the COVID-19 pandemic and has continued to experience a stable economic progression this year, backed by several government initiatives and higher oil prices. The International Monetary Fund also highlighted that the Arab world’s second largest economy is set to grow more than 6% this year, after an expansion of 3.8% in 2021.
Several major banks in the UAE also shared their forecasts on the economy in 2022: Emirates NBD estimates a 7% growth, First Abu Dhabi Bank projects a 6.7% expansion and Abu Dhabi Commercial Bank forecasts a progress of 6.5%.
“There are increased chances for growth being stronger in 2022 due to mainly better-than-expected performance in some of the non-oil sectors such as tourism and hospitality, real estate, transportation and manufacturing,” the Central Bank said.
The Department of Economy and Tourism noted that Dubai hosted about 11.4 million overnight international visitors in the first 10 months of the year, 134% more on the same period in 2021. In summary, the UAE is close to returning to pre-pandemic levels. As for the UAE’s foreign trade, it is expected to reach AED 2.2 trillion by the end of the year as the UAE economy proves to be a strong currency, going against the weakening global trade growth trend.
The Property Sector
In a report by Property Finder, off plan and secondary market property sales in Dubai reached a 12-year high in Q3 in terms of volume and value. 25,456 sales transactions amounting to worth AED 69.72 billion were recorded, making an increase of about 62% in volume and 65% in value, in comparison to Q3 2021.
As for Abu Dhabi, the market recorded 4,441 transactions amounting to AED 20.93 billion in Q3, the DMT reported.
The government revenue increased in the first six months of the year by 46.7% on a yearly basis to AED 305.6 billion due to increased taxes and other social contributions. In addition, the rally in oil and gas prices and expected increase in production boosted public spending further.
As for expenditure, current government spending increased by 6.1% yearly in the first half of 2022 to AED 180.1 billion compared to 5% during the same period last year.
The central bank has also recently revised its projection for the UAE headline inflation downwards to 4.9% given the latest developments in oil prices, with the regular forecasting average Brent prices to be around $102 per barrel this year, which is less than what was previously expected, in addition to a moderation in food prices, compared to the previous quarter.
