Emirates NBD has revised its forecast for non-oil growth in the UAE, increasing it from 4.5% to 5.0% for this year. This revision has raised the headline GDP growth to 3.7%, up from the previous estimate of 3.3%. Khatija Haque, Emirates NBD's head of research and chief economist, stated that the bank assumes no growth in the oil and gas sector due to Opec+ production limits. However, if there is an increase in the UAE's target production level, it could pose an upside risk to the GDP forecast.

Despite external challenges and higher interest rates in 2023, the UAE's economy has demonstrated remarkable resilience. Haque mentioned that although there is an expectation of only a modest ease in monetary policy from the Fed towards the end of this year with rate cuts of 50 basis points scheduled between September and December, this may weigh on private sector investments. Nonetheless, she anticipates that public sector investments, particularly in transportation and infrastructure, will remain strong in the years ahead.

In terms of Dubai's GDP growth, the figures indicate a 3.3% increase in 2023, driven by the transport, logistics, and hospitality sectors. Information and communication (ICT) and real estate services also played a significant role in Dubai's economy. On the other hand, manufacturing and wholesale and retail trade experienced slower growth in Dubai compared to the national level.

Data specific to Abu Dhabi reveal that non-oil GDP grew by 9.1% in 2023, slightly slower than the 9.2% growth recorded in 2022. Wholesale and retail trade saw a robust growth rate of 7.9% in Abu Dhabi last year, compared to 3.9% growth at the national level. With the oil and gas sector contributing around half of Abu Dhabi's GDP, the contraction of 3.1% in this sector led to a slowdown in headline GDP growth for Abu Dhabi.

Preliminary data shows that the UAE's economy grew by 3.6% in 2023, in line with Emirates NBD's forecast. The non-oil sector exceeded expectations, experiencing a growth rate of 6.2% last year. The financial services sector emerged as the fastest growing, expanding by 14.3% year-on-year, followed by transport and logistics with 11.5% year-on-year growth, and construction and real estate services.