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IMF impressed with growing UAE economy

The International Monetary Fund (IMF) has praised the UAE’s financial and economic developments which continue to attract foreign inflows of capital and talent, underpinning economic growth.

A delegation from the IMF recently met with Khaled Mohamed Balama, Governor of the Central Bank of the UAE (CBUAE), to discuss the latest monetary and financial system developments, the outlook for the short term and the UAE’s monetary policy priorities.

The IMF mission also met with several stakeholders and policymakers from across various government departments, praising the open dialogue which took place with the authorities and stakeholders.

The organisation said the UAE continues to benefit from strong domestic activity, and estimates non-hydrocarbon GDP growth to be above 4% this year, with a similar figure predicted for 2024.

After the meeting CBUAE Governor Balama said: “We value the continued and transparent collaboration with our major international stakeholders, such as the IMF. The CBUAE is committed to upholding international best practices to support the continued stability of the financial system and contribute to sustainable global economic growth.”

Sheikh Hamdan Bin Mohammed Bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of Dubai Executive Council, said: “The economic expansion is consistent with the goals of the Dubai Economic Agenda D33 to double GDP growth over the next decade and consolidate the emirate’s position as one of the world’s top three urban economies.”

Sectors including transportation, wholesale and retail trade, finance and insurance, accommodation and food services, and manufacturing grew significantly in the first half of this year, collectively contributing 93.9% of growth in the period, according to figures from the Dubai Data and Statistics Establishment (DDSE).

Its Chief Executive, Younus Al Nasser, said: “The economic growth we have seen across various sectors and activities reflects the resilience of the emirate’s economy and its commitment to achieving its economic targets outlined in the Dubai Economic Agenda D33.”

He added: “The Dubai Data and Statistics Establishment calculates economic performance according to international standards and scientific principles, relying on recent, accurate and comprehensive data, and employing the latest data techniques, in line with Dubai’s aspirations in digital transformation.

“This, in turn, reflects the government’s strong belief that data forms the foundation of digital transformation, enabling a precise understanding of reality, informed decision-making, and future forecasting and planning.”

And Hamad Obaid Al Mansoori, Director-General of Digital Dubai, said “the growth achieved in the first half of 2023 reflects the overall performance of Dubai’s economic ecosystem, which, in turn, aligns with the government’s efforts to create favourable conditions for investment, enhance business competitiveness, increase foreign trade and promote digital transformation in the emirate’s economy”.

The DDSE figures show trade activities added value of AED53.6 billion (£12bn) in H1 2023, growing by 1.7% over the same period in 2022, and contributing 23.9% of the GDP and 12.9% of total growth.

Transportation and logistics outperformed all other sectors with growth of 10.5% in H1 2023, compared with the same period last year. The sector contributed 42.8% to the overall recorded first-half growth, generating Dhs31.4 billion in added value.

The hotel and food services sector reported a 9.2% growth rate in the first half of 2023, with an added value of about Dhs7.9 billion. The sector contributed 3.5% to the economy and 9.5 percent to overall growth.

A report from Digital Dubai’s Dubai Data and Statistics Establishment showed that real estate activity grew by 3.6 %, contributing 8.2% to the overall economy and 9.2% to total growth.

Financial and insurance activities saw growth of 2.7% during the first half of 2023, contributing 11.9% to the GDP, with an added value of Dhs26.6 billion, in addition to contributing 9.9% to the total growth.

Information and communications activity recorded a 3.8% growth in the first half of 2023, compared with the same period in 2022, achieving an added value of Dhs9.6 billion and contributing 5% of the total growth.

Other economic sectors achieved growth of 0.7% during the first half of 2023, and together contributed a combined 6.1% of total growth.