Abu Dhabi’s non-oil economy records 6.1% Q1 growth

Value of Abu Dhabi's non-oil economy grows to a 9-year high in Q1 2023

Published: Mon 26 Jun 2023, 6:38 PM

By
Issac John

Driven by the robust performance of non-oil economic activities, Abu Dhabi's gross domestic product (GDP) surged by 3.9 per cent in the first quarter of 2023 compared to the same 2022 period.

The statistical estimates provided by Statistics Centre – Abu Dhabi (Scad) indicate a remarkable 6.1 per cent growth in non-oil GDP during the first quarter, “propelled by exceptional performances in construction, wholesale and retail trade, transportation and storage, and financial and insurance services.”

In 2022, Abu Dhabi’s economy achieved the highest growth rates in the Middle East and North Africa region. The emirate's GDP recorded a growth of 9.3 per cent, while the UAE’s GDP at constant prices totalled Dh1.62 trillion last year, achieving a growth of 7.9 per cent and totalling Dh1.86 trillion at current prices ---- an increase of more than Dh337 billion compared to 2021 or a growth of 22.1 per cent.

This growth reflects the successful integration of various economic sectors, as a result of the relentless and continuous efforts to maintain the emirate’s economic diversification, Scad said in a statement.

The emirate’s non-oil GDP (at constant prices) surpassed the highest quarterly value of the past nine years, reaching Dh146 billion in the first quarter of 2023 compared to Dh137.7 billion in the first quarter of 2022, as the total GDP reached Dh276.6 billion. This outstanding growth brought the contribution of non-oil activities to the total GDP to its highest level in eight years at 52.8 per cent.

“Abu Dhabi is committed to strengthening its economic scene by achieving a strong, stable, smart and sustainable knowledge-economy. The non-oil activities have been experiencing strong growth rates of non-oil sectors and share of its contribution to the total GDP to 52.8 per cent, despite mounting challenges in the global landscape,” said Ahmed Jasim Al Zaabi, Chairman of the Abu Dhabi Department of Economic Development (ADDED).

“Fostering Abu Dhabi’s resilient and diversified economy will continue to be the key focus for decades to come while developing human capital, attracting the best talent, investments, and economic partners. Building upon the latest statistical data, Abu Dhabi is further opening its economy to the world, strengthening the emirate’s appeal as an ideal market for foreign investors, businesses, start-ups, and entrepreneurs from around the world,” Al Zaabi added.

Abdulla Gharib Alqemzi, acting director-general of Scad, said the quarterly estimates of the GDP statistics reveal the continued growth of the economy of Abu Dhabi at remarkable pace. “This growth presents increased opportunities for attracting investments and capital, while reflecting the success of the ambitious vision embraced by the wise leadership in enhancing the emirate's global prominence."

Alqemzi said the first quarter of 2023 witnessed a strong performance of non-oil activities, characterised by exceptional growth rates. These rates have contributed significantly to the overall percentage of this sector's contribution to the emirate's GDP, reaching unprecedented levels. “This accomplishment showcases the emirate's success in creating an investment climate that fosters economic awareness among the current and future investor community."

Data shows construction activities have demonstrated exceptional performance, achieving the highest quarterly growth rates in nine years during the first quarter of 2023 and the fourth quarter of 2022 in a row. The growth rates stood at 14.4 per cent and 14.5 per cent respectively, compared to the corresponding periods in the previous year.

“This impressive growth is attributed to the sector's appeal to both local and foreign investments, as well as its ability to achieve high completion rates, with a notable increase of 37 per cent in the number of newly-completed buildings. As a result, the construction sector contributes 8.5 per cent to the gross domestic product of the emirate of Abu Dhabi during the first quarter of 2023,” the Scad statement said.

Accommodation and food services experienced a growth of 14.5 per cent in the first quarter. Data from the Department of Culture and Tourism indicates that hotel occupancy rates exceeded 40 per cent during this timeframe. “These figures highlight the successful implementation of the visions and strategic plans established by the emirate, aiming to attract over 24 million visitors in 2023.”

The financial and insurance sector recorded an 11.5 per cent growth during the first quarter of 2023, compared to the same period last year, reflecting the strong performance of the banking sector, with some banks reporting net profits exceeding 50 per cent during this quarter. Data indicates that the financial and insurance sector contributed 6.3 per cent to the GDP of Abu Dhabi in Q1.Transport and storage activities have consistently maintained notable growth rates for over two years, recording a growth rate of 13.6 per cent in Q1. “This growth is evident from the substantial increase in the value of this sector over the past two years, with the quarterly added value approaching Dh5 billion,” the statement said.

The wholesale and retail trade sector has witnessed sustained expansion, with a notable growth of 13.9 per cent in the quarter. The added value of this sector reached its highest quarterly level in the past nine years, contributing 6.0 per cent to the GDP.