Meed | UAE economy maintains robust growth

UAE economy maintains robust growth

25 October 2023

UAE economic growth is largely on track as projected in 2023, with the growth estimates and forecasts remaining much as they were earlier in the year.

The latest estimates from the Washington-based IMF indicate a 3.4 per cent real GDP growth rate for the year, down only 0.1 per cent from the 3.5 per cent projected in April 2023, and still comfortably ahead of the global growth forecast of 3 per cent. The economy is then projected to pick up tempo in 2024 to a growth rate of 4 per cent.

The growth of the UAE’s non-oil economy has been higher than its oil growth over the course of 2023, with the IMF expecting the non-oil growth rate for the year to exceed 4 per cent, benefitting from strong domestic activity. It also projects a repeat of this performance in 2024.

The repeated extensions of the Opec+ production cuts have affected the country’s oil sector growth. However, the UAE’s oil output is set to accelerate next year with the UAE’s 2024 Opec+ production quota increase.

Consumer price inflation in the country is expected to have eased to an annual average of 3.1 per cent by the end of the year, compared to 4.8 per cent in 2022. This is then forecast to ease further to about 2.3 per cent in 2024, or roughly baseline levels.

Ali al-Eyd, the leader of an IMF team that visited the UAE in September, noted that “fiscal and external surpluses remain high on the back of high oil prices. The fiscal balance is expected to be around 5 per cent of GDP in 2023, driven by oil revenue and strong economic activity”.

Speaking to the broader fiscal and structural reforms under way in the UAE, Al-Eyd added: “The phased introduction of a corporate income tax that began in June 2023 will support higher non-oil revenue over the medium term.

“Public debt is projected to continue to decline, falling firmly below 30 per cent of GDP in 2023, including with the benefit of the Dubai emirate reducing its public debt by AED29bn ($7.9bn) in line with its Public Debt Sustainability Strategy. The current account surplus is expected to be notably above the medium-term level in 2023 and 2024.”

Surge in activity

In the latest assessments of business activity in the country, measured through the S&P Global purchasing managers’ index (PMI) survey, the UAE has shown an uptick in September, with the index rising to 56.7, where a value over 50 denotes growth.

This is up from 55 the previous month and is the most significant leap for the index since June, indicating a positive turn for the country’s non-oil private sector.

The index performance was driven by a rise in new orders, the sub-index for which reached 64.7 in September in a significant jump from 57.6 in the preceding month. This reflects a level of new order growth not witnessed since June 2019, and the evidence of rising demand came from across both domestic and external markets.

According to S&P, “the rate of new order growth was sharp and faster than the trend observed since the survey began in August 2009”.

The output sub-index also climbed to 62.8 in September, up from 61.9 the previous month, reflecting the influx of new orders, while there was also a knock-on boost to hiring, with non-oil firms reporting an increase in employment.

Below the country level, the PMI index for Dubai reached its highest level in three months, rising to 56.1 in September, up from 55.0 in August.

According to S&P, the index has averaged 55.5 over the first three quarters of the year, paralleling the first nine months of 2022, and this consistency aligns with a forecast of 4.0 per cent real GDP growth for Dubai in 2023.

There was a surge in new orders in Dubai, similarly to the fastest rate since mid-2019. According to Daniel Richards, senior Middle East and North Africa economist at Emirates NBD, this in turn “also boosted business confidence, which rose to the highest level since March 2020, just before the Covid-19 pandemic crisis took hold”.

Despite rising input costs, which saw the most substantial increase since July 2022, “the strong orderbook outweighed the impact of rising costs on sentiment”, notes Richards.

Growth areas

In terms of the sectors of growth, both the construction sector and wholesale and retail trade exhibited robust performances. The construction index reached a three-month high, rising to 54.5, and the wholesale and retail trade index reached 56.5, helping to lead the overall index score for Dubai.

The positive outlook in retail resulted in the fastest employment growth in that sector since May 2019.

Looking ahead, the UAE is addressing the central issues of energy transition through the lens of its UAE Energy Strategy 2050 and UAE Net Zero 2050 in the lead up to the UN Cop28 climate summit in November, while other areas of strategic focus for 2050 remain economic diversification, trade partnerships, digitalisation and green initiatives.

MEED’s November 2023 special report on the UAE includes:

> COMMENT: UAE eyes global leadership role
> POLITICS: Abu Dhabi networks on the global stage
> ECONOMY: UAE economy maintains robust growth
> BANKING: UAE banks enjoy the good times
> UPSTREAM: Hail and Ghasha galvanises UAE upstream market
> DOWNSTREAM: Adnoc spurs downstream gas expansions
> POWER: UAE closes ranks ahead of Cop28
> WATER: UAE ramps up decarbonisation of water sector
> PROJECTS: Top 10 UAE clean energy projects
> CONSTRUCTION: UAE construction sector returns to form
> TRANSPORT: UAE aviation returns to growth

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John Bambridge

Exclusive from Meed

Tender issued for Libyan gas project
17 September 2026
Nakheel awards $218m Dubai Islands buildings deal
17 September 2026
Aldar and Mubadala acquire Masdar City Square
17 September 2026
Dubai announces new 80km highway corridor
16 September 2026
Contractors submit Expo 2030 convention centre interest
16 September 2026

Tender issued for Libyan gas project
17 September 2026
An invitation to bid has been issued for a contract to conduct environmental assessments for the project to expand the Mellitah oil and gas complex in Libya.

The bid submission deadline is 2pm today (17 September) Libyan time.

The scope of the project includes provision of:
- An environmental baseline study (EBS)
- An environmental impact assessment (EIA)
- An environmental management plan (EMP)
The client is Mellitah Oil & Gas (MOG), which is a joint venture of Italy’s Eni and Libya’s National Oil Corporation (NOC).

MOG is based in Tripoli and operates both onshore and offshore oil and gas facilities.

The joint venture owns and operates six major oil and gas fields across the North African country.

According to the tender documents, the company that is awarded the contract will need to prepare environmental management measures in compliance with:
- Libyan environmental legislation
- Ministry of Environment requirements
- NOC environmental guidelines
- Applicable international environmental standards and best practices
The expansion of the Mellitah oil and gas complex is part of a project estimated to be worth $8bn.

The wider project is known as the Mellitah Complex Expansion & CO2 Management Integrated Development Project.

It has six main packages:
- Onshore package
- Offshore Structure A
- Offshore Structure E
- Subsea pipeline package
- Site preparation work
- Carbon capture and storage facility
Security issues and political instability have been a major problem for Libya’s oil and gas sector since the country’s civil war started in 2011.

Earlier this month, the Mellitah oil and gas complex was forced to shut down temporarily due to a protest over deteriorating public services.

The existing onshore complex includes housing, processing units, storage facilities and export facilities.

It also serves as the launch point for the Greenstream pipeline, which delivers Libyan gas directly to Italy.

The planned expansion of the complex will involve:
- Construction of a new fourth gas processing train
- Construction of a third condensate train
- Construction of a third natural gas liquids fractionation train
- Construction of a fourth sulphur recovery unit train
- Installation of a hydrogen sulphide enrichment unit
- Installation of a sulphur recovery unit
- Construction of other associated facilities
The Mellitah complex is located about 100 kilometres west of Tripoli and is a key energy facility in the west of the country.
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Wil Crisp

Nakheel awards $218m Dubai Islands buildings deal

17 September 2026

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Dubai-based developer Nakheel, now part of Dubai Holding, has awarded a main construction contract worth more than AED800m ($218m) for phases one and three of Bay Grove Residences at Dubai Islands.

The contract was awarded to the local firm Metac General Contracting Company.

It covers the construction of 537 apartments, comprising one- to four-bedroom units, across seven residential buildings.

Phase one includes 296 units in four buildings, while phase three comprises 241 units across three buildings.

The works are scheduled for completion in late 2028.

Bay Grove Residences will ultimately comprise 1,154 homes across 15 buildings. Planning is under way for the remaining 617 homes in phases two and four, with further contract awards expected.

In August last year, Nakheel awarded a AED2.6bn ($708m) contract to Abu Dhabi-based Fibrex Contracting to build the Bay Villas project at Dubai Islands. The contract includes constructing 636 villas.

In April this year, another AED527m ($143m) contract was awarded to local firm Al-Nasr Contracting Company to construct the primary infrastructure and utilities works on Island B at the development.

The Dubai Islands development consists of five islands spanning 18.6 square kilometres. It features more than 59 kilometres (km) of waterfront and 20km of beaches, as well as parks, golf courses, promenades and cycling paths.

The offshore island project gained renewed momentum in 2022, when Nakheel unveiled a new masterplan and rebranded it as Dubai Islands.

The reclaimed islands were originally part of the Palm Deira project, which was partially completed before being put on hold in 2008.

READ THE SEPTEMBER 2026 MEED BUSINESS REVIEW – click here to view PDF

Nuclear power ambitions gather pace; Kuwait keeps dealmaking alive despite war; Region invests in raising gas processing capacity.

Distributed to senior decision-makers in the region and around the world, the September 2026 edition of MEED Business Review includes:

> AGENDA: Gulf nuclear revival takes shape

> MARKET FOCUS: Kuwait keeps dealmaking alive under fire

> INDUSTRY REPORT: Gas processing takes centre stage in Mena region

> INTERVIEW: Emsteel persists with business productivity and efficiency

> TUNNELS: The Gulf’s next construction boom is happening underground

To see previous issues of MEED Business Review, please click here

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Yasir Iqbal

Aldar and Mubadala acquire Masdar City Square
17 September 2026

Abu Dhabi-based sovereign wealth fund Mubadala Investment Company and local developer Aldar have completed the acquisition of Masdar City Square at Masdar City, in a transaction valued at AED918m ($250m).

The deal was executed through their joint venture established in 2024.

Masdar City Square comprises more than 47,000 square metres (sq m) of net leasable area across seven office buildings.

Completed in Q1 2026, the development is 99% occupied. Tenants include Taqa, the Department of Energy, Emirates College and the Mohamed Bin Zayed University of Artificial Intelligence.

The transaction expands the joint venture’s real estate portfolio in Masdar City, which is now valued at AED4.7bn ($1.3bn).

Masdar City is one of the region’s leading hubs for clean energy, artificial intelligence, advanced research and sustainable urban development.

The joint venture acquired The Link project at Masdar City for AED654m ($178m) in April.

Comprising about 32,000 sq m of net leasable area across five buildings, The Link is fully leased to a portfolio of major tenants, including Abu Dhabi Future Energy Company (Masdar) and the Mohamed Bin Zayed University of Artificial Intelligence.

The asset includes Grade A, Leed Platinum office space, a net-zero-energy headquarters building, a multi-use hall and residential accommodation, supporting its position as a high-performing, integrated component of Masdar City.

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Yasir Iqbal
Dubai announces new 80km highway corridor
16 September 2026

Dubai has approved the construction of the new fourth corridor, a major highway programme aimed at boosting inter-emirate connectivity, increasing road capacity and easing congestion.

The corridor will extend 80 kilometres, from Al-Faya Road in Abu Dhabi to Al-Shanouf Road in Sharjah.

It will include 12 lanes, 72 bridges and 17 tunnels.

The project is expected to reduce travel times by up to 60% and serve more than 3.1 million people, while providing links to Al-Maktoum International airport and Etihad Rail.

It will have the capacity to accommodate 24,000 vehicles per hour in each direction.

The project will be delivered in two phases. The first phase, running from Al-Shanouf Road to Dubai-Al Ain Road, will be delivered at a cost of AED3.5bn ($953m).

The second phase will stretch from Dubai-Al Ain Road to Al-Faya Road in Abu Dhabi.

Hamdan bin Mohammed: In line with the directives of His Highness Sheikh Mohammed bin Rashid Al Maktoum to boost investment in infrastructure, I approved the New Fourth Corridor to strengthen Dubai’s road network and enhance connectivity with the UAE’s federal road network.… pic.twitter.com/zlIyY2yKBN

— Dubai Media Office (@DXBMediaOffice) September 16, 2026

The scheme adds a fourth spine to a network that has long relied on three main corridors: the E11 (Sheikh Zayed Road/Al-Ittihad Road); the E311 (Sheikh Mohamed Bin Zayed Road) and the E611 (Emirates Road), which together carry more than 850,000 vehicles commuting between Dubai and the northern emirates daily.

That concentration has made the route one of the country’s most congested, with peak-hour bottlenecks a persistent problem for residents. The new corridor is designed to divert a significant share of that traffic onto a higher-capacity route, rather than add pressure to the existing network.

The project also aligns with the Dubai 2040 Urban Master Plan, which anticipates population growth to 5.8 million by 2040 and calls for the expansion of roads, railways, airports and ports to support that growth and reinforce Dubai’s position as a global trading hub. This is reflected in the corridor’s direct links to Al-Maktoum International airport and Etihad Rail.

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Yasir Iqbal

Contractors submit Expo 2030 convention centre interest

16 September 2026

Register for MEED’s 14-day trial access

Expo 2030 Riyadh Company (ERC), responsible for delivering the Expo 2030 Riyadh venue, received contractor interest on 14 September for a contract to design and build a convention centre in the site's Collaboration District.

Construction is slated to begin in January 2027 and take 29 months. The development will cover a total gross external area of more than 28,000 square metres (sq m). The total programme area will be about 22,000 sq m and the gross floor area will be 17,000 sq m. The maximum height of the building will be 41.5 metres.

The venue will be laid out across two levels, with a mezzanine, roof terraces and a 4,030 sq m basement, in addition to mechanical, electrical and plumbing and back-of-house spaces.

Two flexible exhibition halls are planned, covering a combined 7,280 sq m, as well as 3,800 sq m of pre-function space, 650 sq m dedicated to meeting rooms and 2,200 sq m of outdoor exhibition space in the north and south plazas.

The appointed main contractor will assume responsibility for packages including the early works substructure and the lead design consultant's deliverables, while carrying out the full scope of superstructure, above-ground waterproofing, external facades, masonry, base build and specialised fit-outs for VVIP, VIP and visitor areas.

Further scope includes delivering comprehensive MEP services; vertical transportation; final infrastructure tie-points; public-realm hard and soft landscaping; testing, commissioning, handover documentation; and management of the defects liability period.

The expression of interest notice was floated on 13 September.

The unusually brief expression of interest deadline of just one day underscores a compressed procurement timeline.

This accelerated tender and evaluation schedule signals that project organisers are operating under time pressure to secure contractors and maintain the tight schedule required ahead of the event's opening.

ERC expects to award the formal contract by the end of this year and begin construction in January next year.

The project is due for completion in early 2030, in time for the main event in October of that year.

Site progress

Construction activity at the Expo site is accelerating, with Riyadh moving to award its first major vertical contracts and advancing infrastructure works across the programme.

Earlier this month, MEED exclusively reported that ERC has tendered a contract to deliver the Souq areas within the expo site.

These areas are divided into five precincts, with a total development area of about 300,000 sq m.

In September, Saudi Arabia’s Royal Commission for Riyadh City awarded a design-and-build contract for the construction of a new metro station catering to the Expo 2030 site.

In April, ERC awarded two contracts for the next phase of infrastructure works at the site to local firm Alyamama Company.

The scope covered the construction of road networks and infrastructure for water, sewage, electricity, telecommunications and electric vehicle (EV) charging.

These awards followed ERC’s January award of an estimated SR1bn ($267m) contract for initial infrastructure works at the site to local firm Nesma & Partners.

That scope covered about 50 kilometres of integrated infrastructure networks, including internal roads and essential utilities such as water, sewage, electrical and communications systems and EV charging stations.

The masterplan covers 6 square kilometres, making it one of the largest sites ever designated for a World Expo event. Situated north of the Saudi capital, the site will be located near the future King Salman International airport and will provide direct access to landmarks within Riyadh.

The Public Investment Fund, Saudi Arabia’s sovereign wealth vehicle, launched ERC – a wholly owned subsidiary – in June 2025 to build and operate facilities for Expo 2030.