Non-oil activity underpins UAE economy
11 April 2024
The latest news and analysis on the UAE includes:
> Dubai real estate boosts construction sector
> UAE and Kenya launch digital corridor initiative
> UAE in talks to invest in European nuclear power infrastructure
> Abu Dhabi’s local content awards surge to $12bn
> Dubai tunnels project dominates UAE pipeline
> UAE marks successful power project deliveries
Economic activity in the UAE appears to be holding up relatively well amid the regional turmoil sparked by the start of the Gaza war in November.
Abu Dhabi recorded GDP growth of 3.1% in 2023, according to full-year estimates released by the Statistics Centre Abu Dhabi on 1 April. That marks a substantial drop from the 9.3% level seen in 2022, but an improvement on the 2.3% growth over the first nine months of 2023.
Despite falling oil prices and the disruption to Red Sea shipping in the final quarter, there have been ongoing positive signs for the non-oil sector, which now accounts for around 53% of the total economy. Non-oil activity grew by 9.1% in 2023, down only slightly from the 9.2% level recorded a year earlier.
That non-oil activity is likely to continue to be a key element for economic growth for as long as the UAE and its partners in the Opec+ alliance maintain their voluntary restrictions on crude production. There is no clear timeline for when that policy might change, but David Pickett, assistant economist at Oxford Economics, said he anticipated “a significant increase in oil production from 2026, aided by new facilities and subsiding geopolitical uncertainty”.
In the meantime, the Central Bank of the UAE has adjusted its growth expectations for this year, cutting its forecast for 2024 from the previous 5.7% to 4.2% while predicting a rebound to 5.2% the following year—figures that are higher than many independent observers’ expectations.
Trade and investment
A wave of free trade deals is helping the country’s economic prospects. To date, the UAE has signed comprehensive economic partnership agreements (CEPAs) with 12 countries, the most recent being with Kenya in late February. Another is due to be finalised with Malaysia by June.
Deals with India, Indonesia, Israel, Turkey and Cambodia have already come into effect, while others with Colombia, Costa Rica, Georgia, Kenya, Mauritius, South Korea and the Republic of Congo are all in line to follow. Trade talks are ongoing with numerous other countries, including Australia, Chile, the Philippines and Vietnam.
However, the rapid pace of negotiations means it is not yet clear what impact these deals are having on trade flows.
“It is arguably too early to assess the economic impact of these trade agreements, with many coming into force less than 12 months ago and with full bilateral trade data for 2023 yet to be published,” said Jeanne Walters, senior economist at Dubai-based Emirates NBD, in a report published in early March.
Also helping the country’s position is its release in February from the strictures of the Paris-based Financial Action Task Force’s ‘grey list’ of jurisdictions under increased monitoring. The UAE authorities had been targeting this development for some time, and it should ease the path of economic growth for a country that relies heavily on international trade.
Minister of State Ahmed Bin Ali Al Sayegh set out the decision’s importance soon after the announcement, saying it “enhances investors’ and international financial institutions’ confidence in the country’s economy and financial system, especially considering the UAE’s status as a financial, commercial and economic hub”.
One measure of the country’s commercial reputation is its ability to attract investment. Despite increased competition from Saudi Arabia for international capital, a March report by Emirates NBD Research found that the UAE was second only to the US globally in terms of the number of greenfield foreign direct investment (FDI) projects it attracted in 2023.
The number of UAE FDI projects for 2023 was recorded at 1,280, up 36% on the previous 12 months. Most of these were in Dubai, which attracted 1,036 projects – more than any other city in the world – while Abu Dhabi had 172 projects.
In an effort to continue to attract international capital, the government is now said to be looking at offering 10-year ‘golden licences’ to businesses. The topic was discussed at a meeting of the Economic Integration Committee, chaired by Economy Minister Abdulla Bin Touq, in late March.
Inclement geopolitics
Perhaps the biggest cloud on the horizon is the brutal Gaza war, which could yet have a larger economic and domestic political impact, not least because of the sensitivity around the UAE’s diplomatic relations with Israel.
Like other Gulf countries, the UAE has been sending a steady stream of humanitarian aid to Gaza, but those efforts received a setback on 2 April, when Israel attacked an aid convoy run by World Central Kitchen – a partner of the UAE and others in the Amalthea Initiative aimed at providing a maritime corridor for aid from Cyprus to Gaza.
The UAE’s Ministry of Foreign Affairs issued a statement in which it “condemned in the strongest terms” the Israeli strike. Emirati officials were already understood to be considering ways to offer more protection to aid deliveries, and this will now be even higher up the agenda.
Even as relations have soured, there has been no indication that the country is considering altering its diplomatic ties with Tel Aviv, forged under the Abraham Accords of September 2020.
Nevertheless, while there has been little outward sign of public discontent within the UAE over the conflict, officials around the Gulf are said to be increasingly wary of the potential for the war in Gaza to cause a popular backlash.
One lesson from the broader region in recent decades is that an economic downturn can encourage political discontent, too, but it is far easier to maintain public order in a prosperous economic environment. By that measure, the UAE should have little to fear, given its robust non-oil performance of late.
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Leadership role
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The news about the Algeria project came just over two weeks after MEED reported that Petrofac had also stopped work on an oil project in Libya and cut staff in the North African country.
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The combined market capitalisation of the MEED Top 100 largest listed companies in the Middle East and North Africa rose to $3.73tn in mid-May 2026, against $3.48tn a year earlier – a 7.2% gain that recovers most of the value lost in the prior two years’ editions. The aggregate is not the story.
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In the UAE, by contrast, Adnoc Gas has remained broadly flat at $66.7bn, with its Q1 2026 net income dropping 15% and conflict damage estimates indicating that full capacity will not be restored until 2027. Borouge meanwhile held, while Adnoc Drilling and Adnoc Distribution gained by 14% and 8%, respectively.
There was some slippage in the petrochemicals sub-cluster, with Saudi Basic Industries Corporation (Sabic) posting a net loss of $6.96bn and sliding 3%, alongside a 2% slide for the energy sector-adjacent Industries Qatar.
Banking and industry
The banking sector, which accounts for 33 of the 100 entries and 18% of the list by value, expanded by an aggregate 6.3% in absolute terms. Al-Rajhi Bank, the largest banking entry at $107.9bn, reported FY2025 net profit up 26% to SR24.8bn ($6.6bn); total assets passed SR1tn for the first time and Q1 2026 net profit rose a further 14%.
Emirates NBD, up 23% year-on-year to $47.1bn, reported FY2025 record profit before tax of AED29.8bn ($8.1bn) and likewise crossed AED1tn in total assets.
Kuwait Finance House also rose by 19%, Abu Dhabi Commercial Bank 19% to $28.7bn and Saudi National Bank 11%. Qatar National Bank stalled and slid 1%, while several smaller banks saw gains. Egypt’s Commercial International Bank rose 74% to $8.4bn off a depressed base, Jordan’s Arab Bank meanwhile rose 55%, Oman’s Bank Muscat by 52% and RakBank by 32%.
Several sectors have gained significantly owing to their direct exposure to the Iran conflict’s supply-chain repricing, including logistics, fertilisers and mining.
Logistics firms in the list gained 44% in absolute terms, with Saudi Arabia’s Bahri reporting Q1 2026 net profits up 303% year and revenue up 129%.
Marsa Maroc, the Casablanca-listed port operator, also entered the list at $6.6bn, up 85% on an African expansion that spans 34 terminals across 20 ports following a Liberia management deal signed in February.
Adnoc Logistics rose 32% to $11.6bn, while Air Arabia, the Sharjah-based low-cost carrier, joined the list at $6.1bn as it absorbed redirected long-haul flows. Nakilat, the Qatari liquefied natural gas shipping operator, was the sector’s sole softener, down 12% on slower throughput.
Mining and fertiliser entries sit alongside the logistics gainers. Jordan Phosphate Mines is the cleanest single expression of the post-Hormuz repricing visible on the list – up 127% year on year to $13.2bn, as the World Bank’s April 2026 Commodity Markets Outlook projects fertiliser prices to rise nearly 31% in 2026.
Maaden rose 23% to $65.3bn after FY2025 net profit jumped 156%, backed by record phosphate production; high aluminium output; and rising silver, copper and aluminium prices linked to artificial intelligence, data centre, solar and electric vehicle demand.
Morocco’s Managem also entered the list at $19.7bn, having almost tripled in value in the past two years on cobalt, silver and copper prices and African expansion.
Sabic Agri-Nutrients rose 44% on a 30% 2025 net profit increase, while Fertiglobe rose by 40% – both potentially anticipating a 60% forecasted rise in urea prices.
Property and other trends
The direction of the property and real estate sector has been uniformly downward. The Iran conflict has driven both a slump in UAE property sales and prices and a similar tourism-adjacent correction in Saudi Arabia. Both the Mecca-focused Umm Al-Qura and Jabal Omar development firms have seen their valuations slashed by more than a third, while Makkah Construction & Development slid by 15%.
The UAE’s Emaar Properties and Dar Al-Arkan and Qatar’s Ezdan Holding have also all seen slides of more than 15%. Kuwait’s Mabanee, which rose by 22%, is the one exception in the sector.
In Saudi Arabia’s mid-tier, Acwa Power shed 29% in value even as its revenue rose 18% and its net income 5.4%. Elm Company likewise shed 33%, Dr Sulaiman Al-Habib 19% and the Saudi Tadawul Group 21%.
Mouwasat Medical Services, MBC Group, Nahdi Medical and Saudi Logistics Services fell out of the list entirely on the same trajectory. Each had reported FY2025 earnings rises before the decline. What corrected was the valuation, not the operations.
Acwa Power’s trailing four-quarter average price-to-earnings ratio was 166x, and even after this year’s decline sits at 88x against the Saudi market average of 17.8x. Elm sits at 26x, Al-Habib at 33x, Saudi Tadawul Group at 42x – all rich by any comparable benchmark.
Many of these entries have fallen away from their peak valuations as the cooling of the gigaproject programme since early 2025 has undermined sentiment.
One example that sits on the same axis from the UAE side is Abu Dhabi National Energy Company (Taqa), which fell by 28% from $95.3bn to $69.0bn despite a 6% net income rise, even as capital expenditure also expanded by 50%.
There are now nine entries from Morocco’s Casablanca bourse against six a year ago, with an aggregate value of $74.7bn, up from $50.8bn. Industrial contractor Societe Generale des Travaux du Maroc,entered via a December 2025 initial public offering (IPO). Several Moroccan stocks have also slipped, however, including Taqa Morocco, down 42%; Maroc Telecom, down 18%; Banque Populaire, down 13%; and Bank of Africa, down 10%.
There has been a similarly divergent trend among 2024 IPO entrants. While OQ Exploration & Production rose 68% to $10.1bn and is now the largest stock on the Muscat Securities Market, the UAE’s Talabat – 2024’s second-largest IPO at $9.2bn – has corrected 33% to $6.1bn.
The Multiply Group has been replaced on the list through its November 2025 merger into 2PointZero Group, which now sits in the top 30 entries at $19.6bn.
Regional repricing
Four trends underpin the list’s 7.2% recovery. The conflict has repriced specific cohorts sharply higher – logistics up 44%, mining and fertilisers up 43%, the Yanbu refiners returning, and Aramco recovering to $181bn – with gains contingent on the Strait of Hormuz remaining closed.
Regional banks have maintained last year’s momentum, with assets crossing trillion-unit thresholds and loan books supported by project activity. Six names have posted double-digit gains that are unlikely to reverse if conditions normalise.
Saudi mid-tier stocks have corrected largely on valuation rather than operations, despite many reporting earnings growth through 2025, as confidence in gigaproject-driven growth has weakened. Property has also softened in the region as conflict has reduced routine and religious tourism.
The 12-month outlook depends on whether Hormuz reopens, whether Saudi mid-tier valuations stabilise, and whether banking expansion holds under broader repricing.
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Developers win deals for $3.5bn of Mecca projects
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The Royal Commission for Makkah City and Holy Sites has awarded six real estate development deals. The projects, which cover a total land area exceeding 2.7 million square metres (sq m), will require a total investment of SR13.3bn ($3.5bn).
The sites are located within the neighbourhoods of Jurhum South, Al-Khalidiyah, Al-Hajlah, Al-Hindawiyah East, Al-Hindawiyah South and Al-Hindawiyah West. The projects will be delivered as partnerships with domestic real estate developers, institutional investors and dedicated private investment funds.
A consortium consisting of Makkah Construction & Development Company, Umm Al-Qura for Development & Construction Company and Al-Rajhi United Real Estate Company will develop the Hindawiya West and Hindawiya South districts, which have a combined area of nearly 1.15 million sq m, adjacent to the Masar Destination project. The consortium informed the Saudi Stock Exchange (Tadawul) that it received letters of award for the project on 31 May.
The initial cost of the project is estimated at SR6bn. Umm Al-Qura will act as the consortium leader and development manager, while Makkah Construction & Development Company will serve as the financial partner. The infrastructure works will be executed by Al-Rajhi United Real Estate Company as the technical partner, with the entire development financed through a private, closed-ended real estate investment fund overseen by a Capital Market Authority-licensed manager.
A consortium comprising First Avenue for Real Estate Development Company, Dar Al-Majed Real Estate Company and Rekaz Real Estate Company has been awarded the concession for the East Hindawiyah site. Located 1.8 kilometres from the Holy Grand Mosque, the 235,000 sq m plot is expected to cost SR2bn to develop, which includes land acquisition and foundational infrastructure. The development will be structured as a real estate investment fund managed by Jadwa Investment, with the ultimate goal of creating an integrated urban destination featuring retail, office, hospitality and residential components. The final contract signing for this deal is expected by 10 June 2026.
Ladun Investment Company, in partnership with Al-Ayuni Investment & Contracting Company, has signed a deal for the Al-Khalidiyah district. With a targeted sales value exceeding SR6bn, the consortium will establish a closed-ended private real estate investment fund to execute extensive infrastructure works, subdivide the land plots, and handle subsequent marketing and sales. The detailed scope of works involves complete engineering designs, public park planning and utility coordination with entities such as National Water Company and Saudi Electricity Company, before a contract is signed by 9 June.
Saudi property dreams: Read the January 2026 MEED Business Review
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