meed-logo

line1 line2 line3
SIGN IN / REGISTER

UAE economy steers clear of global woes

24 April 2023

Related reads on the UAE:

> Two billion riders use Dubai Metro

> Surge in tourists boosts Dubai hospitality

> Abu Dhabi strengthens its position at home

> UAE calls for reform of international financial institutions

> UAE president appoints son as Abu Dhabi crown prince

> UAE and Israel sign customs cooperation deal

> UAE moves ahead with digital currency

 

The UAE economy is expected to maintain a course of robust economic growth in 2023, avoiding the effects of the creeping global economic slowdown.

The Washington-based IMF projects a growth rate of 3.5 per cent for the country in 2023 – a rate of expansion well clear of the 2.8 per cent global average amid what has become a worldwide slowdown. The forecast is also ahead of the projected 3.1 per cent growth rate for the Middle East and North Africa.

Though a step down from the 7.4 per cent growth in 2022, and a modest downgrade of 0.7 per cent from the projection in October of a growth rate of 4.2 per cent this year, the UAE’s economic activity remains firmly buoyant. Its growth is forecast to rise again to 3.9 per cent in 2024.

The minor slowdown in the UAE’s economic growth is primarily due to Opec+ cutting oil production quotas, which is reversing some of the past year’s increases in oil production across the region. However, despite the cuts and the weakening of oil prices, the UAE’s oil sector revenues are expected to remain healthy, maintaining a government budget surplus of approximately 3.7 per cent of GDP this year.

Inflationary pressures have also eased since the peak of last year. Disinflation is expected to continue in the coming months, reaching 2.1 per cent this year, down from 4.8 per cent in 2022.

In light of such considerations, the Central Bank of the UAE has also put out a more optimistic projection of a sustained GDP growth rate of 3.9 per cent in 2023. 

More positive still is Issam Abu Suleiman, regional director for the GCC at the World Bank, who has forecast that the UAE economy will continue to grow by 4.1 per cent despite the challenging global economic conditions.

More limited projections also exist, including a report by the Institute of Chartered Accountants in England & Wales and Oxford Economics that estimates that the growth will slow to 3.2 per cent in 2023, as weaker oil growth weighs on the more buoyant 3.9 per cent growth in the non-oil sector.

Positive sentiment

For businesses on the ground, the projection of close to 4 per cent non-oil growth remains cause for optimism. 

This has been reflected in the S&P UAE Purchasing Manager’s Index (PMI), which rose yet higher from 54.3 in February to 55.9 in March (with a value over 50 indicating growth).

S&P’s report noted a pick-up in new order growth to a five-month high, as well as a rise in capacity pressures that has seen the fastest increase in employment since July 2016. The construction sector was particularly active in hiring amid a slew of new project launches led by off-plan real estate schemes.

The UAE aims to double the size of its economy by 2031 as it continues to diversify away from oil and gas

The UAE’s rebounding real estate market is more generally a key driver of the country’s sustained non-oil growth. House prices are on the rise in Abu Dhabi and property sales in Dubai have hit decade highs in recent months. 

Tourism is also recovering, with Dubai regaining its spot as one of the world’s busiest aviation hubs. International visitors are forecast to increase by 20 per cent in 2023.

Ipsos’ Primary Consumer Sentiment Index ranked the UAE second in the world in terms of consumer perceptions of the strength of the economy, with 63 per cent of respondents believing it to have a strong economy. Of those polled, 81 per cent also reported being comfortable with investing in the future and 86 per cent expecting the local economy to be stronger in the next six months.

Ratings agency Moody’s has also reaffirmed the UAE’s long-term local and foreign currency issuer ratings at Aa2 with a stable outlook, citing exceptionally low credit risk with its well-balanced budget targets and limited federal spending requirements. 

The introduction of corporate income tax, effective 1 June 2023, will result in further government revenue growth starting from 2025.

Moody’s also pointed to the UAE’s ongoing economic diversification. The country’s progress to date in this area remains well ahead of its GCC peers in terms of the expansion of its non-hydrocarbons revenue, private sector development and overall international attractiveness to foreign businesses and talent.

Future outlook

Looking ahead, the UAE aims to double the size of its economy by 2031 as it continues to diversify away from oil and gas. To achieve this, it needs an average of 7 per cent GDP growth a year, which it hopes to achieve by forging trade agreements and investing in global growth sectors such as green hydrogen.

The UAE’s foreign trade rose by 17 per cent year-on-year to reach AED2.2tn ($599.1bn) in 2022. In the decades ahead, the country aims to attract AED550bn in foreign direct investment by 2031 and AED1tn by 2051.

Abdullah bin Touq al-Marri, the UAE’s minister of economy, has noted that the UAE’s active business environment, which is supported by both national and foreign private sectors and an attractive labour market for international talent, has contributed to the growth of the economy.

By 2030, the government aims to increase the number of small and medium-sized enterprises (SMEs) to 1 million and raise the contribution of SMEs to the country’s non-oil GDP to 63.5 per cent.

In January this year, Dubai also launched its D33 economic agenda, which aims to grow the emirate’s economy to AED32tn by 2033 through a combination of transformative projects and a doubling of foreign trade to AED25.6tn by expanding trade links with Africa, Latin America and Southeast Asia.

This month's special report on the UAE includes: 

> GOVERNMENT: Abu Dhabi strengthens its position at home

> ECONOMY: UAE economy steers clear of global woes

> BANKING: UAE lenders chart a route to growth

> UPSTREAM: Strategic Adnoc projects register notable progress

> DOWNSTREAM: Gas takes centre stage in Adnoc downstream expansion

> POWER: UAE power sector shapes up ahead of Cop28

> WATER: UAE begins massive reverse osmosis buildup

> CONSTRUCTION: Dubai construction needs major project launches

https://image.digitalinsightresearch.in/uploads/NewsArticle/10761289/main.gif
John Bambridge

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

Click here to register
Exclusive from Meed
Related Articles
  • What actually slows a gigaproject down

    9 September 2026

     

    Ask anyone delivering a major programme in the GCC what causes delays and sequencing will come up early. Utilities go in too late. Approvals lag behind construction. Stations, depots and access roads are procured as if they belong to different projects rather than one system.

    “None of this is new. The industry has understood these risks for years,” says Alan Caldwell, managing director for transport and infrastructure at WSP Middle East.

    For Caldwell, that is what makes the pattern worth interrogating rather than simply restating.

    “The more important question is why the same issues around interfaces, approvals, stakeholder alignment and delivery sequencing continue to slow major programmes when the risks are already so well understood,” he says.

    The answer, he argues, is not that these programmes are too big or too technically complex. What breaks a schedule is a wider system delivered as a set of disconnected parts; an approval sitting with an authority team with no visibility of the construction sequence downstream; or a station package proceeding without the utilities diversion it depends on.

    “Infrastructure programmes do not struggle because a railway is too large or a highway network is too complex,” Caldwell says. “They encounter difficulties when interconnected elements are delivered in the wrong order.”

    Sequencing decisions are rarely purely technical either, he adds. They are commercial – shaped by which assets need to unlock value first, which phases are tied to funding, and where sales or investment assumptions depend on infrastructure landing in a particular order.

    Approvals sit at the centre of that logic. On many programmes, they become one of the biggest sources of lost time – not because the requirements are unreasonable, but because approvals are not planned, evidenced or owned as part of the delivery logic from day one.

    Caldwell has seen the same pattern across three decades of Gulf delivery, from early work on Palm Jumeirah to today’s region-wide transport programmes.

    “The decisive factor has often been the same: whether interfaces, approvals, responsibilities and delivery sequencing are aligned early enough to prevent complexity becoming delay.”

    Integration needs to be well understood

    “Most programme teams in the region would say they understand the need for integration,” Caldwell says. Fewer are structured to deliver it. “The harder task is turning that understanding into the way projects are actually set up and managed,” he argues.

    Riyadh Metro is the reference point he returns to, precisely because engineering complexity was not the deciding factor in its delivery.

    Coordinating a city-scale transport system meant aligning design, construction, systems, utilities and stakeholder interfaces across every delivery vertical.

    “The lesson for the region today is clear,” Caldwell says. “Ambitious programmes need a delivery model that gives every contributor a shared view of progress, risk, decision-making and the business case driving programme priorities.”

    That shared view, he argues, will be what the next phase of Gulf delivery is judged on.

    Whether clients, consultants, contractors, operators and approval authorities can work to a single delivery logic will be key.

    “This requires more than coordination meetings. It requires integrated ways of working, shared common data environments and governance structures that make risks, decisions and dependencies visible before they become delays,” he says.

    From reporting progress to managing risk before it lands

    Digital tools have a role here, Caldwell says, but not as a headline in themselves.

    Digital twins, programme visualisation and data-led modelling matter only if they help teams identify and address problems before they affect the wider programme.

    “The real value is not technology for its own sake,” he says. “It is the ability to see, in one place, where approvals are outstanding, where interfaces are unresolved, where programme dates are slipping, where clashes are emerging and where decisions need to be escalated."

    None of it works without governance behind it, he cautions. “A dashboard will not resolve a delayed approval if nobody knows who owns the decision, when it needs to be made, or how it should be escalated.”

    Data only has value if the processes and responsibilities around it are clear, which is why Caldwell frames the shift the region needs not as digitisation, but as a move “from programme management as a discipline focused mainly on reporting and coordination, and towards project and programme intelligence”.

    With many of the region’s programmes running for a decade or more, he adds, delivery models also need to flex as funding assumptions, user needs and policy priorities change along the way.

    “The ambition behind the Gulf’s transformation programmes is not in question,” Caldwell says.

    What will determine how much of it is realised on time is whether delivery models evolve at the same pace: earlier integration, clearer approval pathways, shared data environments, and every contributor working to a delivery logic that connects technical sequencing with the funding and operational case behind it.

    “The region’s next challenge is not imagining bigger projects,” he says. “It is changing the way they are delivered, operated and adapted over time.”

    https://image.digitalinsightresearch.in/uploads/NewsArticle/19502016/main.gif
    Yasir Iqbal
  • Jordan tenders advisory for wastewater treatment plant

    9 September 2026

    The Water Authority Jordan (WAJ) has issued an invitation to prequalify for advisory services for the rehabilitation and expansion of the Shallala wastewater treatment plant in Irbid, northern Jordan.

    The Shallala plant was commissioned in 2013 with a design capacity of about 14,000 cubic metres a day (cm/d).

    The rehabilitation and expansion project will increase its treatment capacity to about 30,500 cm/d to meet projected wastewater flows through 2050.

    The PIU Support and Construction Supervision Consultancy Services tender was released on 19 August.

    The submission deadline is 21 September.

    The consultancy will support the project implementation unit and provide construction supervision services for the project. The project has an estimated value of $69m and is being financed by the European Bank for Reconstruction and Development.

    The planned works include rehabilitating the existing activated sludge and treatment units and constructing a new treatment train.

    The scope also includes installing biogas combined heat and power units, improving sludge handling and dewatering systems, and installing odour control and chemical containment systems.

    WAJ is also undertaking the upgrade and expansion of the Ain Ghazal wastewater treatment plant in Amman.

    The existing facility had a capacity of 330,000 cm/d and is being upgraded to 726,712 cm/d to accept and treat expected incoming flows until 2045.

    The local Arab Towers Contracting Company was appointed as the main contractor for the project last year.

    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:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/19498520/main.jpg
    Mark Dowdall
  • Consultants bid for Abu Dhabi light rail project management

    9 September 2026

     

    Abu Dhabi Transport Company (ADTC) has issued a request for prequalification (RFQ) notice to consultants for a contract for project management engineering consultancy services for the first phase of the light rail transit network, also known as ADT4.

    The notice was issued on 7 September, with a submission deadline of 9 November.

    The project’s first phase will span 19 kilometres (km) and include 23 stations, connecting Zayed International airport (AUH) with nearby areas, including Yas Island, Al‑Raha Beach and Khalifa City.

    The key sections of the tram are:

    AUH to Yas Island: The tram will start from Terminal A at AUH and run through the Yas tunnel to Yas Gateway Park. It will serve areas including Yas Bay, Media Zone, Yas Plaza, Yas Drive, Yas Mall, Sea World and Water Edge.

    This section covers 13km and includes 13 at-grade stations and one underground station.

    Al-Raha: This section will stretch for 4.3km and run along Al-Raha Street. It will serve areas including Al-Zeina, Al-Muneera and Al-Bandar, towards the Aldar head office. The section will include seven at-grade stations.

    Etihad Plaza: This section will pass the Etihad Aviation Training Centre and span about 1.7km. It will feature a main depot near the Etihad Airways headquarters, along with two at-grade stations.

    The tender also covers the procurement of 25 trams, each with a capacity of 270 people, along with associated systems.

    The project was officially launched at the GlobalRail exhibition in Abu Dhabi in October last year.

    Referred to as Abu Dhabi Tram Line 4, the project will be delivered in three phases.

    Construction of the first phase is expected to start next year. The tram is slated to begin operations by 2030.

    Future phases will extend towards Khalifa City and serve additional destinations across Yas Island.

    The project forms a key part of the recently announced AED170bn ($46bn) package of national transport and road projects to be implemented by 2030.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/19493532/main.jpg
    Yasir Iqbal
  • Medina’s KEC signs real estate project development deal

    9 September 2026

    Medina’s Knowledge Economic City (KEC) has signed an agreement with Riyadh-based Kaden Investment Company to develop a mixed-use project in Medina.

    The project will have an estimated gross floor area of about 230,000 square metres (sq m).

    According to a statement filed by KEC with the Saudi Exchange (Tadawul), the project – called Multaqa Al-Madinah 2 – will be built on a 92,000 sq m plot located directly north of the first phase of the Multaqa Al-Madinah development.

    It is expected to include about 1,527 residential units across three residential zones, along with commercial and office space totalling about 31,108 sq m of net leasable area.

    It will also feature parking, recreational and service facilities, landscaping and other supporting infrastructure.

    KEC and Kaden intend to deliver the project through a closed-ended real estate investment fund regulated by Saudi Arabia’s Capital Market Authority.

    Under the proposed structure, KEC will contribute the land as an in-kind contribution and hold 75% of the fund units, while Kaden will contribute cash and hold the remaining 25%.

    Kaden will also serve as the development manager.

    KEC said the land has been initially valued at about SR692.3m ($184.6m), while the total equity required for the project is estimated at around SR833m.

    Once final agreements are signed, KEC expects to receive SR67.7m in cash and fund units valued at approximately SR624.6m.

    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:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/19492407/main.png
    Yasir Iqbal
  • Morocco signs agreement for synthetic fuel complex

    9 September 2026

    Switzerland-based Synhelion has signed an agreement with the Government of Morocco with the aim of developing a large-scale commercial synthetic fuel plant in the country’s southern Tan-Tan province.

    The memorandum of understanding (MoU) relates to a facility with the capacity to produce 100,000 tonnes a year of fuel, according to a statement released by the company.

    Synhelion has secured land for the project site and established a subsidiary in Morocco to develop the fuel complex.

    Gianluca Ambrosetti, one of Synhelion’s co-chief executives, said: “Morocco’s exceptional renewable energy resources and its clear industrial strategy make it an ideal location for scaling our synthetic fuel technology.

    “With the MoU signed, the land reservation secured and our branch in place, we are moving from evaluation to execution and toward our first commercial-scale plant in the region.”

    Synhelion specialises in producing hydrocarbon fuels using renewable energy. Its products include synthetic jet fuel, gasoline and diesel.

    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:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/19489903/main.jpg
    Wil Crisp