UAE economy grows 3.6% in the first half of 2024 on non-oil boost

The UAE's economy grew by 3.6 per cent annually in the first half of this year, driven by the non-oil sector as the country continues its economic diversification strategy.

The country's real gross domestic product (GDP) at constant prices rose to Dh879.6 billion ($239.5 billion) for the six-month period, while non-oil GDP increased by 4.4 per cent annually to reach Dh660 billion, contributing 75 per cent to the total, the Ministry of Economy said.

The strong performance of the non-oil sector was attributed to efforts in boosting entrepreneurship, trade and investment activities, development projects launched at the beginning of the year, as well as tourism activities, Minister of Economy Abdulla bin Touq said.

The UAE, the Arab world's second-largest economy, has been focusing heavily on diversifying its economy away from oil by developing sectors such as technology, manufacturing, tourism, trade and innovation. The country has introduced several reforms including longer-stay residence visas as well as new visa categories to attract more talent.

The country aims to raise its GDP to Dh3 trillion by the next decade as part of its 2031 vision.

The UAE's economy grew by 3.4 per cent in the first quarter of the year, officials said in September.

The same month, the UAE Central Bank said it expects the country's economy to grow by 4 per cent this year, an increase from its June estimate of 3.9 per cent, on the back of a boost from its non-oil sector. Growth will also be supported by global economic agreements, the regulator said at the time.

The UAE reported a record Dh1.4 trillion in non-oil foreign trade in the first six months of this year, according to official figures.

That comes after the UAE signed comprehensive economic partnership agreements (Cepas) with rapidly growing economies in Asia, the Middle East and Africa, including with India, Turkey, Israel, Indonesia, Cambodia, Georgia, South Korea, Chile and Mauritius.

Cepas aim to reduce tariffs and remove bottlenecks that hamper trade. This programme is projected to increase national exports by 33 per cent and add more than Dh153 billion to the economy by 2031.

Trade contributed the most to the country’s non-oil GDP, at 16.5 per cent in the first half of the year, according to the preliminary estimates from the Federal Competitiveness and Statistics Centre. It was followed by manufacturing (15 per cent), financial and insurance activities (12.5 per cent), construction and building (11.6 per cent) and real estate (7.6 per cent).

Transportation and storage topped the list of the fastest growing economic sectors during the first half of 2024, with a growth rate of 8.4 per cent, followed by financial and insurance activities (7.6 per cent) and construction and building (7.3 per cent).

Information and communication activities grew 5.3 per cent, while the restaurant and hotels sector rose 5.1 per cent during the first six months of 2024, driven by “unprecedented activity” in tourism.

Hotel establishments’ revenues rose to more than Dh24.6 billion during the first half of 2024, up 7 per cent annually, with guest numbers rising about 10.5 per cent to 15.3 million, the report said.

Passenger traffic at Abu Dhabi and Dubai international airports rose by 33.8 per cent and 8 per cent, respectively, during the January-June period, according to Central Bank data.

For 2025, the regulator expects the country's economy to grow by 6 per cent, while the International Monetary Fund forecasts expansion of 5.1 per cent.