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
  • Egyptian contractor wins Abu Dhabi Ramhan Island deal

    4 September 2026

    Egypt-headquartered contractor Rowad Modern Engineering has been awarded the main works contract for the Marina Apartments project on Ramhan Island, Abu Dhabi.

    The contract was awarded by the local firm Eagle Hills, which is led by Mohamed Alabbar, the founder and chairman of Emaar Properties.

    Rowad’s scope includes structural and architectural works, finishing, and mechanical, electrical and plumbing systems.

    The company will also deliver infrastructure works, including utility connections to external networks, testing and commissioning.

    The development comprises two residential towers offering 187 residential units.

    The works will be carried out under the consultancy supervision of local engineering firm Mirage Leisure & Development.

    The latest contract award follows Eagle Hills awarding the local firm Arabian Construction Company (ACC) an estimated AED2.5bn ($680m) construction contract to build about 500 villas at the Ramhan Island development, as reported by MEED previously.

    Located off the coast of Abu Dhabi, the Ramhan Island development spans an area of over 4 million square metres.

    The overall development includes the construction of 1,800 villas, 900 residences, a hotel and retail facilities.

    Mohamed Alabbar launched the Ramhan Island development in May 2024.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/19355437/main.jpg
    Yasir Iqbal
  • Egypt to invest $4.5bn in refinery upgrades

    4 September 2026

    Egypt is planning to invest $4.5bn in refinery upgrades, according to the country’s Minister of Petroleum and Mineral Resources, Karim Badawi.

    Egyptian refineries are operating at 80% of capacity compared with 66% two years ago, according to Badawi, who wants further increases in utilisation of existing facilities.

    “We aim to invest around $4.5bn to develop existing refineries and build new units to reduce imports and achieve self-sufficiency in refined products,” he said in a statement.

    In May, Egypt said that it had increased its fuel import budget by almost 40% for the 2026-27 fiscal year amid higher global prices driven by the Iran war, which started when the US and Israel launched an attack on Iran on 28 February.

    Brent crude prices are up about a third since the conflict started, trading at more than $90 a barrel for most of this month so far.

    Badawi said a decline in Egypt’s oil and gas production between 2021 and 2024 occurred because foreign companies were reluctant to invest in the country’s energy sector due to unpaid government debts.

    He said: “We have settled all the debt, which reached $6.1bn in June 2024. As a result, hydrocarbon exploration and production activity grew by nearly 20% this year.

    “We are now moving in the right direction to increase oil and gas output gradually.”

    Despite the ongoing push to develop projects in the country’s oil and gas sector, several key projects have seen significant delays in recent years.

    These include a $2bn hydrocracking complex package that forms part of the wider Assiut oil refinery upgrade project.

    Earlier this month, MEED revealed that mechanical completion of the hydrocracking package is now unlikely to be reached until early next year due to complications in the final stages of construction.

    The hydrocracking complex package has experienced extensive delays over several years.

    In April this year, Badawi called for work to accelerate on the Assiut oil refinery upgrade project, saying it is important for reducing the country’s spending on imported refined products.

    At the time, the oil ministry said the project was 88% complete, with trial operations planned by the end of the year.

    Assiut Oil Refining Company (ASORC), a subsidiary of state-owned Egyptian General Petroleum Corporation, is the project operator.

    France’s Technip Energies is the main contractor, performing engineering, procurement and construction work on the Assiut hydrocracking complex under a $2bn contract awarded by ASORC in February 2020.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/19353521/main.jpg
    Wil Crisp
  • North Field West platform bidders get extra time

    4 September 2026

     

    QatarEnergy has granted contractors additional time to prepare bids for a key tender for the engineering, procurement, construction and installation (EPCI) of large platforms for the giant North Field gas field in Qatari waters.

    The tender, issued earlier this year, forms part of the wider North Field West (NFW) project, the third and last phase of the state enterprise’s North Field liquefied natural gas (LNG) expansion programme.

    The core scope comprises the EPCI of four production deck modules (PDMs) and associated structures. The new PDMs will increase gas production from North Field reservoirs and provide additional gas feedstock for the NFW LNG development.

    QatarEnergy has set 15 September as the deadline for technical bid submissions, while commercial bids are due on 10 November, according to sources.

    The previous deadlines for submission of technical and commercial bids were 30 August and 25 October, respectively, MEED previously reported.

    The following contractors, among others, are understood to be bidding:

    • China Offshore Oil Engineering Company (China)
    • Larsen & Toubro Energy Hydrocarbon (India)
    • McDermott (US)
    • Saipem (Italy)

    Before issuing the PDM tender, QatarEnergy awarded McDermott a contract for the EPCI of four offshore jackets that will also support gas feedstock supply for the NFW LNG project. The contract is estimated to be worth about $200m, MEED reported in January.

    North Field LNG expansion

    QatarEnergy is advancing the three phases of its estimated $40bn North Field LNG expansion project. EPC works on all three giant projects are progressing.

    QatarEnergy is understood to have committed nearly $30bn to the first two phases – North Field East (NFE) and North Field South (NFS) – which will lift Qatar’s LNG production capacity from 77.5 million tonnes a year (t/y) to 126 million t/y by 2028.

    QatarEnergy awarded the main EPC contracts for NFE in 2021. The project was intended to raise LNG output to 110 million t/y by 2025. The $13bn EPC package – covering the EPCI of four LNG trains, each with a capacity of 8 million t/y – was awarded in February 2021 to a consortium of Japan’s Chiyoda and France’s Technip Energies.

    In May 2023, QatarEnergy awarded the $10bn main EPC contract for NFS to a consortium of Technip Energies and Consolidated Contractors Company (CCC). The contract includes two LNG trains, each with a capacity of 7.8 million t/y.

    Once fully operational, the first two phases are expected to add 48 million t/y of LNG supply to the global market.

    QatarEnergy took the final investment decision on NFW this year, awarding an EPC contract estimated at $8bn to a joint venture comprising Technip Energies, CCC and Gulf Asia Contracting (GAC) in February.

    Chiyoda carried out the front-end engineering and design (feed) work for the NFW LNG project.

    The NFW scope covers the EPC of two LNG trains with a combined capacity of 16 million t/y, as well as associated facilities for gas treatment, natural gas liquids recovery and helium extraction.

    In addition to LNG, NFW is expected to produce about 175,000 barrels of oil equivalent a day of condensate, ethane and LPG.

    With all three phases now under EPC execution – and NFE scheduled for commissioning later this year – QatarEnergy is positioning itself to remain one of the world’s largest LNG suppliers over the long term.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/19352006/main.jpg
    Indrajit Sen
  • Contractors prepare Dubai Metro Gold Line prequalifications

    4 September 2026

     

    Register for MEED’s 14-day trial access 

    Contractors are preparing to submit their prequalification statements on 7 September for a contract to build the new Gold Line as part of the Dubai Metro network’s expansion.

    Dubai’s Roads & Transport Authority (RTA) issued the request for qualification notice for the project in June, with an initial submission deadline of 17 August, as MEED exclusively reported.

    This followed the RTA’s invitation to contractors to express interest in building the new Gold Line in May.

    Dubai officially announced the launch of the new Gold Line in April.

    In a post on social media site X, Sheikh Mohammed Bin Rashid Al-Maktoum, UAE Vice President and Prime Minister and Ruler of Dubai, said the project will cost about AED34bn ($9.2bn).

    The Gold Line will increase the Dubai Metro network’s total length by 35%.

    The project is scheduled for completion in September 2032.

    The Gold Line will be a fully underground network covering more than 42 kilometres, with 18 stations.

    It will pass through 15 areas in Dubai, benefiting 1.5 million residents.

    The project is expected to provide connectivity to over 55 under-construction real estate development projects.

    The Gold Line will start at Al-Ghubaiba in Bur Dubai and end at Jumeirah Golf Estates.

    It will connect to Dubai Metro’s existing Red and Green lines and integrate with the Etihad Rail passenger line.

    The contractor will be responsible for the design and build of all civil works, electromechanical equipment, rolling stock and rail systems.

    The selected contractor will also be required to assist in the systems maintenance and operations during an initial three-year period.

    In October last year, MEED exclusively reported that the RTA had selected US-based engineering firm Aecom to provide consultancy services for the Dubai Metro Gold Line project.

    Stage one covers concept design, stage two covers preliminary design, stage three covers the preparation of tender documents, stage four encompasses construction supervision, and stage five covers the defects and liability period.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/19350865/main.png
    Yasir Iqbal
  • Mace confirms Muscat cultural complex appointment

    3 September 2026

    UK-headquartered engineering firm Mace Consult has confirmed its appointment to manage the construction of the Sayyid Tarik Bin Taimur Cultural Complex in the Al-Seeb area of Muscat.

    The firm will provide project leadership, programme management, commercial oversight and delivery assurance services.

    The complex will be developed on a 400,000-square-metre (sq m) site. Centred on an urban plaza, it will bring together a range of cultural and institutional facilities.

    These include a 23,000 sq m national library, a 15,500 sq m national archives, four facilities buildings with a combined area of 14,000 sq m, and a 5,000 sq m energy and data centre.

    At the heart of the development is the national theatre, which will include a 1,000-seat auditorium and a 250-seat auditorium. The facilities will sit within landscaped gardens and water features, alongside a signature canopy structure.

    In October 2023, the Ministry of Culture, Sports & Youth awarded a design-and-build contract for the complex to a joint venture of local firm Saif Salim Issa Al-Harrasi and Turkiye’s Sembol Construction, MEED reported.

    In January 2026, UAE-based steel structure manufacturer Emirates Building Systems, a wholly owned subsidiary of Dubai Investments, won a contract to deliver the project’s structural steel package.

    Last month, Kuwait-based engineering and architecture consultancy SSH was appointed as the project’s construction supervision consultant.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/19314737/main.jpg
    Yasir Iqbal