Post: Strong performance of non-oil sectors is driving UAE’s economic recovery

Mustafa Abdel Azim (Dubai)

Economic indicators for the first half of this year showed positive growth rates in key sectors that exceeded expectations and painted an optimistic picture of the UAE economy’s continued ability to stem the wave of global economic slowdown at the start of the second quarter. According to the monitoring carried out by the “União”, 5 main sectors in the structure of the national economy, which included the sectors of foreign trade, tourism and travel, real estate and foreign investment, achieved a visibly positive indicator, which increases expectations. This year’s GDP exceeds 5%, according to estimates by local and universal financial and banking entities.
Positive figures since the beginning of the year prompted the Central Bank of the United Arab Emirates to raise its forecast for real GDP growth this year to 5.4%, from a previous forecast of 4.2%, after the national economy caught up. a qualitative leap in growth. 8.2% in the quarter. The first one this year, due to a strong increase in oil production, in addition to strong growth in real non-oil GDP, which is expected to grow by more than 4.3%. this year, which is an important indicator that the UAE’s national economy has entered a strong recovery phase.

No foreign oil trade
The UAE’s non-oil foreign trade continued its upward trajectory, setting a new record in the first half of this year at AED 1 trillion and AED 58 billion, for the first time in history, with a growth rate of 17%. The first half of 2021 is an increase of 25% and 35% compared to the same period of 2020 and 2019.
The fact that the UAE’s non-oil foreign trade has crossed the threshold of Dh 1 trillion in the first half of 2022 indicates the success of the strategic directions and vision to accelerate full recovery and return to the desired economic recovery. effects. The spread of the “Covid-19” pandemic in international trade in general and reinforced the great leap in non-oil intermediate foreign trade, the ability of this sector to continue its record growth this year, and the total non-oil foreign trade has exceeded two billion of dirhams by the end of the year, especially considering the UAE’s tendency to expand its network of trading partners and strengthen its position as the main gateway for the flow of trade between all parts of the world.

tourist boom
After the rapid recovery that the tourism sector showed from the Covid-19 pandemic in the last quarter of last year, the sector continued to recover this year, which was reflected in the main performance indicators of hotels in the country during the first semester. this year, according to data from tourism departments and authorities and reports from international consulting institutes.
Data and estimates from the same institutions showed that the total number of hotel guests in the country increased to 10.5 million visitors in the first half of 2022, compared to 8.3 million visitors in the first half of 2021, and an expected increase of 26.5. %, finally announced from Abu Dhabi, Dubai and Ras Al Khaimah, hotel establishments in the three emirates welcomed more than 9.5 million, including 7.12 million visitors in Dubai, 1.84 million visitors in Abu Dhabi and 521 thousand visitors in Ras Al Khaimah. Indicating that the total number of hotel guests in the country could surpass the 22 mark by the end of this year, one million visitors compared to 19.2 million visitors in 2021.
Data from Colliers International, which specializes in real estate and hotel consulting, indicates that every city in the country has seen significant improvements this year compared to 2021, with Abu Dhabi, Dubai and Sharjah showing the biggest increases in occupancy rates. and revenue from available rooms.
The sector is preparing for a high tourist season, which begins in mid-September and will extend until April 2023, amid positive signs of receiving large tourist flows.

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90 million passengers
The UAE’s three main airports in Abu Dhabi, Dubai and Sharjah have seen a strong recovery in operational traffic since the beginning of this year, with passenger numbers doubling in the first half of this year to reach 42 million passengers. . which is equal to the total number of passengers in 2021, amid expectations that the total number of passengers will reach more than 90 million by the end of this year.
According to preliminary estimates, passenger traffic at the country’s airports has recovered to more than 70% of the level of movement recorded before the “Covid-19” pandemic, which amounted to about 128 million passengers in 2019, with the expectation to keep going strong. travel recovery. traffic, following the easing of restrictions imposed by all countries in the world due to the Covid-19 pandemic, and a record demand for travel to and from the United Arab Emirates.

The real estate market is constantly growing.
In the first half of this year, the real estate sector in the country experienced a continuous growth in the numbers of real estate sales and transactions, which, according to the agency Fitch Ratings, also benefited from the recent government initiatives launched by the government. Economic recovery due to a sharp rise in oil prices in 2022.
Meanwhile, Asteco, a real estate consultancy, confirmed the continued strong performance of the UAE real estate sector in the second quarter of this year, despite record results and growing inflation concerns globally.
Asteco explained in its second quarter 2022 report entitled “The real estate market in the United Arab Emirates” that the geopolitical tensions that the world has witnessed have led to the strengthening of the position of the UAE as a safe destination for tourism, life and the work. Investments and education. The report also attributes the growing demand for real estate to renovations, proactive government, including the introduction of the golden home, and the shift to a digital economy.

Boost foreign direct investment
In the field of foreign direct investment, expectations point to a significant increase in the volume of foreign direct investment flows to the State in the first half of this year, in various investment sectors, thanks to new and special incentives and advantages. . established its attractiveness for investments, among which is the change in the law of commercial companies, mainly that allowed 100% foreign participation in all sectors, except those with strategic impact.

Increase growth forecast
The positive numbers have led several international institutions to revise their forecasts for the UAE’s GDP growth this year, despite growing uncertainty over the outlook for global economic growth and the possibility of entering a recessive tunnel. The previous forecast, which was around 3.5% in February last year. In two recent reports published by the International Monetary Fund, namely: the “Global Economic Outlook” report and the “Financial Monitor” report, positive outlook for the UAE’s economic indicators from 2022 to 2027. GDP growth and finance. The World Bank, in turn, confirmed the ability of the UAE’s economy to continue its growth pace, far from the global economic slowdown, and expects the country’s economy to reach 4.7% growth this year, with the UAE benefiting from the growth rate. Oil prices.

Source: Al Ittihad

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