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UAE gross domestic product grew 7.6% in 2022

The UAE aims to double the size of its economy by 2031 and diversify away from hydrocarbons

The UAE’s economy expanded 7.6 per cent last year, a senior official said, about double the rise in gross domestic product (GDP) recorded in 2021 as the Gulf state rebounded sharply from the Covid-19 pandemic.

While higher energy prices supported economic growth across the Gulf region’s oil exporters last year, a slowdown is forecast this year with a more uncertain oil price outlook and a challenging global macroeconomic environment.

The UAE aims to double the size of its economy by 2031 and diversify away from hydrocarbons.

“In order to do that, we need seven per cent GDP growth every year,” UAE Minister of Economy Abdullah bin Touq Al Marri told Reuters in an interview on the sidelines of the Investopia conference in Abu Dhabi on Thursday.

“This will come in with all the strategies we have put in place: the impact of the trade agreements, the openness to trade...the aspects of investments seen recently, into the energy transition, for instance, into green hydrogen,” he said.

Foreign trade up

The UAE’s foreign trade hit Dh2.2 trillion ($599 billion) in 2022, indicating a 17 per cent year- -on-year increase, and it has signed bilateral trade agreements with global partners spanning India, Israel and Indonesia. Talks with Turkey, and others, are underway.

The UAE will also host the UN’s flagship COP28 climate conference at the end of the year.

“The UAE’s strategy is an agile strategy...we are going to see challenges come in to the economy quicker and faster,” said Al Marri.

“And we need to find solutions not in government but with the private sector, they have a lot of solutions to these kinds of challenges,” he said.

Investors participation

Al Marri, who is also Chairman of Investopia, added that the re-opening of the Chinese economy could play a “big role” in reducing inflation around the globe, especially on goods and products coming from China, one of the UAE’s biggest trade partners.

The conference brings together over 2000 participants investors, government officials, thought leaders and entrepreneurs. The event comes in partnership with SALT, the Abu Dhabi Department of Economic Development and Crypto.com.

This year’s event has included 35 sessions and roundtables, where more than 100 speakers including investors, thought leaders, and decision-makers are discussing topics including institutional asset allocation, AI, emerging markets, venture investing, digital assets, mobility, biotechnology and more.

The event theme is focusing on “Envisioning Opportunities in Times of Change” and three sub-themes: Envisioning Opportunities in Today’s Economy, The Future of the Wealth of Nations, and Growth Opportunities in Times of Decarbonisation.

Doubling economic growth

During the opening session, Al Marri said that the UAE now is in the business of doubling economic growth, incoming foreign direct investment, and investment outflows.

“The 100 per cent full foreign ownership led to a significant increase in the demand of international companies to work in the UAE, reaching 300,000 companies, which would generate a revenue of Dh2.2 trillion,” he added.

Khaldoon Al Mubarak, managing director and Group CEO of Mubadala, said his group’s role is to help advance the nation's globally connected economic base by investing and partnering in the most promising and challenging sectors across over 50 countries.

“Our focus on disruptive innovation in the UAE shapes our future economic base and creates solutions that benefit others. It is why our plans to supercharge our growth are underpinned by collaboration, creating opportunities for people, and driving solutions to pressing global challenges,” he said.

Anthony Scaramucci, founder and chairman of SALT, and Investopia's strategic partner, said the UAE has done a great job at investing in and attracting fintech talent due its effective balance between common-sense regulation and enabling innovation.

“The global financial sector has the largest market capitalisation of any industry in the world, and financial technology threatens to upend the status quo,” he said.

Dealing challenges

Ahmed Jasim Al Zaabi, chairman of Abu Dhabi Department of Economic Development (ADDED), said it is important to learn the art how to address the challenges.

“At this epochal moment for the world economy, it is important to bring key players in the global investment community together to discuss ways to deal with challenges and factors shaping the future. As a founding member of Investopia, the Abu Dhabi Department of Economic Development aspires to advance the rapidly evolving economic landscape organizing,” he said.

“Over the past years, Abu Dhabi has taken a remarkable journey of phenomenal transformation, driven by the wise vision of our leadership and fueled by the ambition of economic diversification, and today we are experiencing our golden era — what we are seeing is the rise of a Falcon Economy," he added.

Al Zaabi said the UAE economy continues to be a dominant force, driven by our leadership's clear vision, agile policies, and robust regulatory and legal frameworks with the aim of encouraging and promoting both foreign and domestic investment.

“Our rapid economic growth along with the growing confidence of the international community to live, invest, and thrive in Abu Dhabi. This phenomenal expansion has been led by the growth of various non-oil sectors of our economy and as a result of the collaborative efforts of the public and private sectors,” he said.

The sessions included: Uncovering the Potential of South-South Investments in Emerging Markets, Fintech Revolution, Growth Opportunities in Today’s Economy, Mobilising New Economies, Reimagining Regional Economic Development Through Finance, Venture into Untapped Markets: Private Growth Investing, Food Security in Times of Climate Change, Trends in Family Wealth, Innovations in Precision Healthcare, Beyond Borders: Harnessing the Power of Global Trade for Investment & Growth, and How Blockchain Will Change Finance.

In addition, the event is hosting a series of closed roundtables by UAE Canada Business Council, Business Finland, and the Emirates News Agency (WAM), in addition to investment meetings that brought together global financial and non-financial institution leaders to discuss areas of collaboration and investment opportunities. Investopia also witnessed new partnerships, in addition to new projects in the health-tech sector.

It is also worth noting that 56 per cent of the participants in Investopia conference 2023 come from within the UAE and 44 per cent from abroad (more than 100 nationalities), 75 per cent from private sector, while 13 per cent from public sector, and six per cent representing academia and students, in addition to six per cent from other international organisations and diplomatic missions.

— With inputs from Reuters and Wam