meed-logo

line1 line2 line3
SIGN IN / REGISTER

UAE economy regains regional lead

29 May 2024

 

The UAE has edged ahead of Saudi Arabia again to take the lead in the MEED Economic Activity Index, which assesses the near-term economic health of regional markets, as a gap has opened up between the economic and fiscal performances of the two countries in 2024 to date.

Saudi Arabia and the UAE entered 2024 with similarly buoyant 4% real GDP growth projections from the Washington-based IMF, but have since diverged. In April, the IMF revised its growth forecast for the UAE to 3.5%, and the forecast for Saudi Arabia 2.6%. 

The World Bank has meanwhile maintained a more optimistic 3.9% real GDP growth projection for the UAE in 2024, but an even lower projection of 2.5% for Saudi Arabia.

The trade and fiscal balance performances of the two countries have also diverged. The UAE is forecast for a 7.8% of GDP current account surplus and 4.5% of GDP fiscal surplus, while Saudi Arabia’s current account surplus has narrowed to 0.5% of GDP, while its budget has slipped into a 2.8% deficit.

Oil price impact

Saudi Arabia’s reduction in its growth and slide into fiscal deficit have both partially been brought about by the impact of softer oil prices and Opec-led production cuts, which have naturally hit the more heavily oil-dependent Saudi economy to a greater extent than the more diversified UAE economy. The UAE Central Bank is forecasting a non-oil GDP growth rate of 4.7% for the country in both 2024 and 2025.

Together, the two countries remain comfortably in the lead at the top of the index, due in large part to the buoyancy of both of their projects markets. Contract award values in the past 12 months for both countries were double the long-term average, while new work outstripped completed work twofold in the UAE and fourfold in Saudi Arabia.

Wider market

Elsewhere in the GCC, Qatar and Oman have both seen their real GDP growth slip in 2024, to 2% and 1.2%, respectively – driven by slight weakness in both the hydrocarbons and non-hydrocarbons sectors. Both countries remain in fiscal surplus, however, and have stable projects markets, with work being tendered at or above the long-term average award values and above the rate of completion.

Kuwait is projected to see its GDP contract for the second year in a row as a weaker oil market and production cuts hit hard. Kuwait is the most heavily oil-dependent and least diversified country in the region, with 95% of exports and 90% of government revenue coming from the oil sector, making the country and its real GDP metric highly sensitive to fluctuations in the oil price – though it still has a fiscal surplus. At the same time, the country’s projects market also continues to underperform, with contract awards 40% below the long-term average and 25% below the rate of completion.

Algeria has meanwhile risen up the ranking and boasts a forecast of 3.8% real GDP growth in 2024 – the strongest in the region, according to the IMF. While it is still expected to remain deep in fiscal deficit, inflation is on a downward trend, and the projects market has above-average contract award activity.

Bahrain, despite a projected 3.6% growth rate in 2024, remains in concerning fiscal and debt positions. Its short-term risk rating was recently elevated to the second-highest level by insurance group Allianz. The Bahraini projects market is also in steep decline, with the value of contract awards in the last 12 months coming in at just over a third of the long-term average and at little more than half the level of project completions.

Morocco, Jordan and Egypt are all expected to experience moderate 2-3% real GDP growth rates this year, while continuing to struggle with persisting current account and fiscal deficits. All three countries also have elevated unemployment and government debt, as well as underperforming projects markets, with awards over the past 12 months at two-thirds or less of long-term historic averages.

Iraq is another country with high oil market dependence and oil price sensitivity and is forecast for just 1.4% real GDP growth this year. Short-term risk in the country is also in an elevated state amid political turbulence and weaknesses in the security situation that have seen repeated attacks by non-state actors on oil sector infrastructure. The projects market nevertheless remains nominally steady for now, with sustained award activity at the level of long-term averages and also at the rate of project completions.

Tunisia has sunk to the bottom of the index with a weakened 1.9% growth rate in 2024 and an even lower growth projection of 1.8% in 2025 as the country continues to be caught up in political chaos and an economic crisis. Short-term risk is high, as are the rates of unemployment and inflation. The projects sector is reasonably active, but contract awards remain below the long-term average.

ABOUT THE INDEX

MEED’s Economic Activity Index, first published in June 2020, combines macroeconomic, fiscal, social and risk factors alongside data from regional projects tracker MEED Projects on the project landscape, to provide an indication of the near-term economic potential of Middle East and North African markets.

 

https://image.digitalinsightresearch.in/uploads/NewsArticle/11824050/main.gif
John Bambridge

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • Construction advances on Riyadh King Salman airport

    19 May 2026

    King Salman International Airport (KSIA) is advancing airside infrastructure works under its long-term expansion programme in Riyadh, including the delivery of a third runway and new private aviation facilities.

    Construction activity on the central runway programme is progressing across several operational zones, with works covering excavation, grading, site preparation and taxiway-enabling infrastructure to support upcoming phases.

    The third runway is intended to increase airfield capacity and cater to the airport’s future operational requirements.

    In a separate development, KSIA has completed initial landside works for the private aviation apron, marking a milestone in the rollout of its executive aviation infrastructure.

    The completed scope includes pavement markings, waterproofing systems, firefighting infrastructure chambers and final operational inspections to support readiness for the next stages.

    KSIA has also secured General Authority of Civil Aviation (GACA) approval for phase one airside works, which includes the planned connection of Taxiway Alpha to the private aviation facilities, strengthening operational integration between executive aviation assets and airfield movement areas.

    The packages form part of the wider KSIA masterplan, which covers about 57 square kilometres and supports Saudi Arabia’s objective of positioning Riyadh as a global aviation and logistics hub.

    The airport aims to accommodate up to 100 million passengers by 2030.

    Saudi Arabia plans to invest $100bn in its aviation sector. The Saudi Aviation Strategy, announced by GACA, aims to triple annual passenger traffic to 330 million travellers by 2030. It also targets air cargo growth to 4.5 million tonnes and an increase in total air connections to more than 250 destinations.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16906496/main.jpeg
    Yasir Iqbal
  • Aldar launches Al-Ghadeer Gardens project

    19 May 2026

    Abu Dhabi-based real estate developer Aldar Properties has launched the Al-Ghadeer Gardens project, located on the Abu Dhabi-Dubai border.

    The new residential development will feature 437 villas and townhouses, offering two-, three- and four-bedroom homes.

    Al-Ghadeer Gardens will include more than 30,000 square metres of landscaped open space, supporting a pedestrian-friendly layout and outdoor-focused living.

    As part of its sustainability and wellbeing approach, the project is targeting Estidama Pearl 2 and Fitwel 2-star certifications.

    Earlier this month, Aldar announced its Q1 financial results, reporting a 20% year-on-year increase in net profit after tax to AED2.3bn ($626m).

    Aldar Development recorded a 14% year-on-year rise in revenue to $1.7bn, while earnings before interest, taxes, depreciation and amortisation (Ebitda) increased 23% to $599m.

    UAE revenue backlog rose to $17bn at the end of March from $16.6bn at the end of December, with an average duration of 29 months.

    The group attributed its performance to revenue from its development backlog and steady income from its investment properties.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16906154/main.jpg
    Yasir Iqbal
  • Iraq trucks oil from the south to Kurdish pipeline

    19 May 2026

     

    Iraq is trucking crude from Basra to the north of the country to be exported via the Iraq-Turkiye Pipeline (ITP), according to industry sources.

    The oil is being loaded into trucks at fields in Basra before being driven to the north, where it is injected into the pipeline network at Khurmala Dome, in the northern section of the Kirkuk field.

    Once it has entered the network at Khurmala Dome, it is transported to the main ITP export pipeline and eventually to the port of Ceyhan in Turkiye, where it can be loaded onto ships.

    The volumes of crude being transported using trucks have surged in Iraq since the US and Israel attacked Iran on 28 February, starting a regional conflict that has disrupted shipping through the Strait of Hormuz.

    One source said: “Most of the crude that is being trucked out of Iraqi oil fields at the moment is going to Syria, but some is being trucked to the north where it is being funnelled through the pipeline.”

    Even with the additional volumes being trucked from the south, Iraq is struggling to boost exports using the ITP.

    At the end of March, Amer Khalil, the director-general of Iraq’s state-run North Oil Company, said that Iraq was exporting 200,000 barrels a day (b/d) through the ITP.

    At the time, he said that the pipeline, which runs from Kirkuk in Iraqi Kurdistan to the port of Ceyhan in Turkiye, was expected to start transporting 300,000 b/d “in the near future”.

    As of early May, the pipeline was still exporting about 200,000 b/d, despite having a nameplate capacity of 1.4 million b/d.

    One of the factors said to be stopping increased volumes from being shipped through the pipeline is that several key oil fields in northern Iraq evacuated staff and stopped production after the US and Israel started their war with Iran.

    Another factor is that Iraq has not invested in domestic pipeline infrastructure to pipe production from Basra to Kurdistan, where it could be exported via the Kurdish ITP route.

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

    Global energy sector forced to recalibrate; Conflict hits debt issuance and listings activity; UAE’s non-oil sector faces unclear recovery period amid disruption.

    Distributed to senior decision-makers in the region and around the world, the May 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/16902345/main1824.jpg
    Wil Crisp
  • Kuwaiti oil services company secures credit facility

    19 May 2026

    The Kuwaiti drilling and oilfield services provider Action Energy Company (AEC) has secured a new credit facility and renewed and expanded an existing facility in order to support the company’s rig fleet expansion.

    The new facility and the expansion were obtained from two Kuwaiti banks and had a combined value of KD40.9m ($132.8m).

    In its statement, AEC said that the facilities support the financing and deployment of new rigs linked to contract awards previously announced with the state-owned upstream operator Kuwait Oil Company (KOC).

    The company added: “They further reinforce AEC’s financing structure and strengthen its ability to execute its contracted fleet expansion plan through 2026 and beyond, while maintaining a disciplined approach to capital allocation.”

    The new credit facility was obtained from Kuwait International Bank (KIB).

    It is worth KD7.3m ($23.7m) and will finance two new 750-horsepower (HP) rigs.

    The renewal and expansion of the existing facility is worth KD33.6m ($109.1m) and was obtained from Commercial Bank of Kuwait (CBK) to finance four new 1,500 HP rigs and one 1,000 HP rig, in addition to the renewal of the existing facilities.

    AEC announced its financial and operational performance for the first quarter earlier this month.

    The company reported a net profit of KD2.2m ($7.1m).

    The company’s revenue grew by 69.2% year-on-year, primarily driven by the expansion of the operating rig fleet from 13 rigs in the first quarter of 2025 to 20 rigs in the first quarter of 2026, including the full-quarter contribution of 10 new rigs deployed during 2025.

    The company is benefitting from a substantial multi-year contracted backlog with KOC.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16902234/main.jpg
    Wil Crisp
  • Emirates awards $5bn engineering complex deal

    18 May 2026

    Register for MEED’s 14-day trial access 

    Emirates Airline has awarded a AED19bn ($5bn) contract to build one of the world's largest engineering complexes in Dubai South.

    The contract was awarded to Beijing-headquartered China Railway Construction Corporation (CRCC).

    CRCC is being supported by French firm Artelia, as the project consultant.

    The complex will cover over 1 million square metres (sq m).

    It will comprise 77,000 sq m of dedicated workshop space for maintenance and repairs, 380,000 sq m of storage and logistics capacity, a 50,000 sq m administrative building for Emirates Engineering and 15,000 sq m of training facilities.

    It will be the world's only complex with a capacity to service 28 wide-body aircraft simultaneously.

    The airline officially broke ground on the project on 18 May. 

    The groundbreaking ceremony was attended by Sheikh Ahmed Bin Saeed Al-Maktoum, chairman and CEO of Emirates Group; Tim Clark, president of Emirates Airline; Khalifa Al-Zaffin, executive chairman of Dubai Aviation City Corporation and Dubai South; and Dai Hegen, chairman of CRCC.

    The facility will enable large-scale retrofits, cabin redesigns and structural modifications to be performed in-house, thereby reducing turnaround times.

    The engineering complex is scheduled for completion in 2030 and will be located at Al-Maktoum International airport.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16895218/main.jpg
    Yasir Iqbal