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

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Saudi Arabia raises electricity tariffs
26 October 2026
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26 October 2026
Nakheel awards $259m Dubai Islands buildings contract
26 October 2026
Morocco plans second high-speed rail phase to Agadir
26 October 2026
Riyadh tenders King Salman Stadium works
26 October 2026

Saudi Arabia raises electricity tariffs
26 October 2026

Saudi Energy, formerly Saudi Electricity Company, has announced revised electricity tariffs, which will take effect on 1 January 2027.

The revised tariff schedule, published on the company’s official website, covers residential, commercial, industrial, agricultural, charitable and government customers.

The largest percentage increase in consumption rates is 16.7%, for residential customers using up to 6,000 kilowatt-hours (kWh) a month. Residential customers will pay 21 halalas/kWh for monthly consumption of up to 6,000kWh, up from 18 halalas. For consumption above 6,000kWh, the rate will rise from 30 to 33 halalas/kWh, a 10% increase.

The industrial tariff will increase by 15%, from 20 to 23 halalas/kWh. Commercial customers, private healthcare facilities and private educational facilities will pay 25 halalas/kWh, up from 22 halalas, for consumption up to 6,000kWh a month, and 35 halalas/kWh above that level, up from 32 halalas.

Tariffs for charities and government customers will also increase. In addition to consumption-based charges, customers will pay a fixed monthly fee based on the capacity of their electricity meter. This replaces the previous separate charge for meter reading, maintenance and billing, with VAT applied to the revised tariffs.

Electricity investment

The new tariffs coincide with changes to water consumption tariffs announced by the National Water Company, also effective from 1 January 2027.

King Salman Bin Abdulaziz Al-Saud directed support measures following a proposal presented by Crown Prince and Prime Minister Mohammed Bin Salman Bin Abdulaziz Al-Saud.

This includes raising the minimum wage required for Saudi nationals to count as full employees towards private sector localisation quotas under the Nitaqat programme.

The tariff changes come as Saudi Arabia plans substantial investment in its electricity infrastructure. In September 2025, Saudi Energy announced plans to invest SR220bn ($58.7bn) in power infrastructure projects between 2025 and 2030.

A June 2025 report by Fitch Ratings forecast negative free cash flow of about SR16bn a year over the period and rising leverage, reflecting the financial demands of the programme.

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Mark Dowdall
Dubai Municipality confirms AED3bn Tasreef drainage awards
26 October 2026

Dubai Municipality has confirmed it has awarded four contracts worth AED3bn ($817m) to expand the emirate’s stormwater drainage network by about 100 square kilometres under phase three of the Tasreef programme.

The projects will cover Jumeirah, Umm Suqeim, Al-Quoz, Al-Barsha, Al-Wasl and Al-Marmoom. The works include constructing and extending main stormwater drainage lines with diameters of up to three metres.

The four packages are part of Dubai’s AED30bn Tasreef programme, which aims to increase the emirate’s stormwater drainage capacity by 700% and reduce costs associated with pumping stations, network operations and maintenance by 20%.

The contracts have been awarded to China State Construction Engineering Corporation (CSCEC) and three local firms: Arifco Group, Nael Construction & Contracting (NCC) and Detech Contracting. Dubai Municipality did not state which projects the awards relate to.

According to sources, the contract awards include packages TF-15-C1, TF-15-C2 and TF-13-C1.

The first package, TF-15-C1, involves the construction of 21 kilometres of main and secondary drainage lines along Al-Wasl Road and in surrounding areas. It will cover Za’abeel 2, Al-Wasl, Jumeirah 1 and 2, Al-Bada’a, Al-Satwa and Dubai World Trade Centre. The estimated $100m contract was awarded to Detech in July, as exclusively reported by MEED.

The second package, TF-15-C2, covers the corridor between Sheikh Zayed Road and Al-Khail Road. It includes about 14km of main drainage lines serving Al-Quoz Industrial Areas 1, 3 and 4, and Al-Barsha 1. In July, MEED reported that CSCEC had won the engineering, procurement and construction contract for this project.

The third package, TF-13-C1, covers Al-Marmoom, where 23km of drainage infrastructure will be developed. According to a source, Arifco has been awarded this contract.

The final package covers Jumeirah and Umm Suqeim, where about 42km of main drainage lines will serve Umm Suqeim 1, 2 and 3; Umm Al-Sheif; Jumeirah 3; Al-Safa 1 and 2; and Al-Manara.

In May, MEED reported that NCC had been awarded a contract to build a sewage and stormwater drainage system, DS-204. However, it is unconfirmed whether this relates to the same project.

Earlier, in February, the municipality confirmed it had awarded contracts for five new projects under phase two of the programme to expand and strengthen Dubai’s stormwater drainage network.

These included two contracts awarded to Detech and one to CSCEC for stormwater drainage infrastructure. In addition, two consultancy contracts were awarded for the study and design of drainage systems in selected areas across the emirate.

Cumulatively valued at AED2.5bn, the new projects will serve 30 vital areas, spanning approximately 430 million square metres and supporting an estimated population of three million residents by 2040.

Previously, in April 2025, an earlier package of awards was announced under phase one of the Tasreef programme. The overall masterplan aims to expand Dubai’s rainwater drainage capacity by 700% by 2033.

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Mark Dowdall
Nakheel awards $259m Dubai Islands buildings contract
26 October 2026

Dubai-based master developer Nakheel, part of Dubai Holding Real Estate, has awarded local firm Parkway International Contracting a construction contract valued at about AED950m ($259m) for phases two and four of Bay Grove Residences on Dubai Islands.

The package covers 617 residential units across eight buildings, ranging from one to four bedrooms, together with basement structures, infrastructure and community amenities including swimming pools, sports courts and fitness centres.

Phase two comprises 360 homes across four buildings, with main construction scheduled for completion in late 2028.

Phase four includes 257 homes across four buildings, with completion targeted for the second quarter of 2029.

The award follows an earlier contract valued at about AED800m ($218m) awarded to local contractor Metac General Contracting Company for phases one and three, covering 537 homes across seven buildings.

Together, the two contracts total more than AED1.75bn ($476m) and account for all 1,154 planned homes across the 15 buildings of Bay Grove Residences.

Project activity on Dubai Islands has gathered pace in recent months. Earlier this month, Nakheel awarded local firm Mar Marine & Building Contracting a contract for marine and coastal works on Island B. The scope includes constructing breakwaters, removing existing rock revetments and creating a new 320-metre beach near the Bay Villas development, as well as remedial and refurbishment works along approximately 3 kilometres of the island’s western shoreline.

In August 2025, Nakheel awarded Fibrex Contracting a AED2.6bn ($708m) construction contract for the Bay Villas residential project. That followed a AED527m ($143m) contract awarded to Al-Nasr Contracting Company in April 2026 for primary infrastructure and utilities on Island B.

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Morocco plans second high-speed rail phase to Agadir
26 October 2026

Morocco has outlined a second rail investment cycle for 2030-35, which includes beginning construction of a high-speed rail extension from Marrakech to Agadir and connecting Essaouira to the national rail network.

The pipeline forms part of the government’s 2026-31 programme, presented to parliament last week.

The Marrakech-Agadir link is estimated to cost close to MD55bn ($5.5bn) and will cover a 240-kilometre (km) route through the High Atlas Mountains via Chichaoua. Civil engineering structures, including tunnels and viaducts, are expected to account for nearly 70% of the alignment.

In September, the government issued a decree declaring the Marrakech-Agadir and Chichaoua-Essaouira rail corridors to be of public utility, paving the way for land acquisition and expropriation procedures.

Under the long-term masterplan Plan Rail Maroc 2040, Essaouira is expected to connect to the network via a separate line branching off at Chichaoua, designed for operating speeds of up to 200km an hour. The mainline to Agadir is designed for speeds of up to 320km/h.

The 2030-35 cycle also includes rehabilitating the Casablanca-Khouribga-Oued Zem line; constructing a new line between Oued Zem and Beni Mellal via Bejaad, with a branch to Fquih Ben Salah; doubling and upgrading the 140km Benguerir-Safi line; expanding capacity on the Fez-Oujda corridor; and building new-generation passenger stations.

The plans follow Morocco’s ongoing MD134bn ($13.4bn) 2024-30 rail investment programme, which focuses on completing the Kenitra-Marrakech high-speed line ahead of the 2030 Fifa World Cup.

The programme also includes developing regional express network services across five regions, electrifying the Fez-Oujda line and completing a freight rail link to the Nador West Med port.

Work on the Kenitra-Marrakech line had reached about 30% by May 2026, with commercial services targeted to begin in September 2029.

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Riyadh tenders King Salman Stadium works

26 October 2026

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Saudi Arabia’s Sports Ministry has tendered a contract covering early works at King Salman International Stadium in Riyadh.

The scope includes enabling works, site preparation and initial construction activities.

The tender was issued on 11 October, with a submission deadline of 19 November.

The stadium will cover about 660,000 square metres (sq m) and seat 92,000. Facilities will include a 150-seat royal suite, 120 hospitality suites, 300 VIP seats and 2,200 dignitary seats.

The wider development will include sports facilities covering more than 360,000 sq m, including two training fields and fan zones; a closed sports hall; an Olympic-sized swimming pool; an athletics track; and outdoor courts for volleyball, basketball and padel.

The stadium is set to host the final of the 2034 Fifa World Cup and will serve as the Saudi national football team’s main base.

US-based architectural firm Populous is the lead architect for the stadium.

Construction of the stadium is expected to be completed by 2029.

The stadium will be located next to King Abdulaziz Park.

Firms submitted prequalification statements for the main design-and-build contract in February.

Saudi stadium plans

In August 2024, MEED reported that Saudi Arabia planned to build 11 new stadiums and refurbish four facilities for the 2034 Fifa World Cup.

Eight stadiums will be located in Riyadh, four in Jeddah and one each in Al-Khobar, Abha and Neom.

A further 10 cities will host training bases: Al-Baha, Jazan, Taif, Medina, Alula, Umluj, Tabuk, Hail, Al-Ahsa and Buraidah.

There are expected to be 134 training sites in the kingdom, including 61 existing facilities and 73 new venues.

Saudi Arabia was officially selected to host the 2034 Fifa World Cup during an online convention of Fifa member associations at the Fifa Congress on 11 December 2024.

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