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UAE aims to grow economy at 7% in 2024, minister says at Economy Middle East Summit 2024

UAE aims to double its gross domestic product to Dh3 trillion by 2030

The global challenges have tested the UAE’s resilience, but the aim is to grow the economy at 7 per cent in 2024, said Abdulla Bin Touq Al Marri, Minister of Economy.

The UAE has been aiming to grow 7 per cent per year in order to double its gross domestic product (GDP) to Dh3 trillion by 2030. The UAE saw nearly 8 per cent growth in 2022. The UAE minister earlier predicted that the economy will grow by up to 5 per cent in 2024.

“The last three decades of low inflation and low interest rates are no longer normal. Now we need to design an economy keeping in mind the current levels of inflation and interest rates,” he said on the occasion of the Economy Middle East Summit 2024, which was held at the Abu Dhabi Global Market (ADGM).

The UAE Central Bank earlier projected 4.2 per cent growth for 2024 and 5.2 per cent for next year. The World Bank last month raised the projected growth for UAE to 3.9 per cent for 2024 and 4.1 per cent for 2025.

The event focused on navigating the global economic landscape beyond 2024 and emphasized the Mena region’s economic outlook amidst new global realities.

Al Marri said the UAE has made great strides in diversifying its national economy and shifting towards a flexible economic model based on knowledge and innovation. As a result, the non-oil sector accounts for 74 per cent of the country’s total GDP.

“The UAE continues its efforts to provide an incubating environment for conducting business and economic activities and develop flexible and competitive legislation and economic policies that will enhance the country’s attractiveness for foreign investments through establishing a suitable economic climate for investors, capital owners, and entrepreneurs. The most notable developments in this regard include the granting of 100 per cent foreign ownership of companies, the modernisation of visa and residency systems, and the introduction of self-employment and long-term residency pathways, which contribute to strengthening the country’s ability to confront global economic changes. They also contribute to consolidating its position as a leading destination for business and investment,” he said.

Roberta Gatti, chief economist for Mena at The World Bank, is optimistic about 2025, anticipating that the brakes on oil production will be taken off. “The governments in the Mena region have to work on balancing the relationship between the public and private sectors. That would be the first step to moving away from an informal economy.”

Gatti said the region is returning to its pre-pandemic trend of low growth, in the context of a global economy that is decelerating for the third consecutive year. “Mena’s GDP is forecast to rise to 2.7 per cent in 2024 from 1.9 per cent in 2023. This outlook is marked by uncertainty, amidst the conflict in the region and rising levels of debt. In addition, rising debt is heavily concentrated in oil-importing economies, which now have a debt-to-GDP ratio 50 per cent higher than the global average of emerging market and developing economies. Oil importers in Mena are borrowing against an uncertain future,” added Gatti.

“For oil exporters, the challenge is one of economic and fiscal-revenue diversification. This is because of the structural change in global oil markets and the rising demand for renewable sources of energy,” he added.

Naima Al Falasi, senior vice president of portfolio strategy, Mubadala, said Generative AI and AI are transforming all industries. “It has made an impact of $23.5 billion in the GCC economy, that’s the benefit we will see in the region,” said Al Falasi.

Dr. Mahmoud Mohieldin, UN Special Envoy on Financing the 2030 Agenda for Sustainable Development and Executive Director, the International Monetary Fund, said recent reports from the World Bank and IMF say there’s a lot to be desired when it comes to economic recovery. “Our regional growth is lower than the global growth numbers. While global growth has shown resilience, things are uneven. The gap between the developed world and the rest has widened.”

While speaking during the panel discussion at the conference, Chris Williamson, chief business economist, S&P Global Market Intelligence, added that the region is running into supply issues because of the Red Sea situation. “Usually, this would lead to inflation. But because we have so many suppliers here, it’s doing a balancing act and prices are not rising the way they should.”