UAE reaping fruits of visionary leadership’s policies: Minister

Dr Thani Bin Ahmed Al Zeyoudi, Minister of State for Foreign Trade, said that the UAE continues to reap the rewards of its visionary leadership’s forward-looking approach through increased global trade and investment openness.

“This is reflected in the record growth in foreign direct investment (FDI) inflows, which surged by 35% in 2023, despite the downward trend in global investment flows, which declined by 2% during the same year. Additionally, the UAE jumped five places in one go to rank 11th globally in terms of its ability to attract FDI, according to the World Investment Report 2024 released recently by the United Nations Conference on Trade and Development (UNCTAD),” Al Zeyoudi said.

“The figures in the report confirm that the UAE is continuing to move in the right direction to strengthen its position as a preferred global destination for foreign investors seeking a growth-stimulating business environment and a haven for ambitious entrepreneurs and creative thinkers seeking to transform their ideas and aspirations into tangible reality under the qualitative privileges provided by the State through its world-class infrastructure, flexible legislation and advanced technology, and its initiatives that stimulate business in various sectors and economic activities,” he added.

The minister cited in this regard the NextGenFDI initiative, the first integrated package to facilitate company formation and offer banking, visa and real estate services in a streamlined manner through a whole-of-government approach.

He also pointed to the Comprehensive Economic Partnership Agreements (CEPA) programme that the UAE has been implementing since the end of 2021, and under which the UAE has concluded agreements with countries of strategic investment and trade importance on the map of the global economy, with the aim of stimulating trade and investment flows between promising markets with about a quarter of the world’s population.” He added: “The value of foreign direct investment that the UAE was able to attract in 2023, amounting to $30.7 billion, is equivalent to about three times that of its closest competitors in the Middle East. And therefore the country has been able to maintain its top position as the most attractive country for investment in the Arab world and regionally with a clear superiority, where it accounted for 45.4% of the total FDI inflows to the Arab countries amounting to $67.6 billion, and 47.1% of the total inflows to West Asia amounting to $65.2 billion, and also about 38.6% of the total foreign direct investment inflows to the Middle East and North Africa region amounting to $79.5 billion in 2023.”

Al Zeyoudi pointed out that the UNCTAD data on FDI inflows and outflows confirms that the UAE continues to make steady and confident progress on the path towards economic diversification and sustainable growth.

A day earlier, the Central Bank of the United Arab Emirates (CBUAE) said that it expects the country’s strong foreign trade performance to continue in 2024 and 2025, sustaining its projected growth for the UAE’s real GDP in 2024 at 3.9 per cent, with expectations for it to further accelerate to 6.2 per cent in 2025.

In its June 2024 Economic Quarterly Review, the apex bank said that country’s non-hydrocarbon GDP growth is expected to remain strong at 5.4 per cent in 2024 and 5.3 per cent in 2025, with the hydrocarbon sector set to grow by 0.3 per cent in 2024, followed by further expansion by 8.4 per cent in 2025.

In the fourth quarter of 2023, the UAE economy expanded 4.3 per cent YoY, above the 2.5 per cent growth registered in Q3 2023. The quarterly increase is due to both, non-hydrocarbon growth accelerating (which accounts for around 75 per cent of GDP) and better performance of the hydrocarbon sector.

These latest figures also showed that the consolidated fiscal balance in 2023 remained positive at Dhs85.6 billion, equivalent to 4.5 per cent of GDP, with total revenue declining by 13.9 per cent to Dhs526.1 billion (27.9 per cent of GDP). Government expenditure increased by 3.1 per cent to Dhs440.5 billion (23.3 per cent of GDP), the report further added, noting that the fiscal sector remains sustainable and will be further strengthened as a result of the recently introduced corporate income tax.

Indicators point towards robust economic activity within the non-oil private sectors, the CBUAE said. As of April 2024, the UAE’s Purchasing Managers’ Index (PMI) was reported at 55.3, driven by continued business optimism on economic prospects. Such positive sentiment is driven by the expectation of ongoing robust demand and sales, expected to support consistent output growth. This is further supported by the anticipation of new initiatives and investments.

Dubai recorded a PMI of 55.1 in April 2024, reflecting persistent growth in the emirate’s non-oil private sector.

According to the figures, the number of employees covered by the CBUAE Wage Protection System (WPS) and average employee salary increased by 7.5 per cent and 9.4 per cent YoY in April 2024, respectively. These positive readings for employment and wage growth point to robust domestic consumption and sustainable GDP growth going forward.

The real estate, tourism and hospitality sector, and transportation sectors collectively represent around 30 per cent of the non-oil GDP, the report highlighted.

The number of residential real estate sales transactions in Abu Dhabi in January-April 2024 was estimated to have increased by 7.7 per cent YoY. Growth was mostly driven by the sales of ready units, which increased by 24.9 per cent YoY, while off-plan sales increased marginally by 0.8 per cent YoY.

Data for Q1 2024 indicated that Dubai sustained its role as a top international tourism hub. The emirate’s hotel occupancy rates stood at 83 per cent, equal to the previous year’s figures, while the average duration of stay per visitor was almost unchanged at 3.9 nights, yet there was a 2 per cent YoY increase in the total occupied room nights, totalling 11.2 nights.

Furthermore, Dubai recorded an 11 per cent rise in tourist arrivals in the first three months of 2024 compared to the same period last year, taking advantage of the revival of worldwide travel demand. During this period, the emirate welcomed 5.2 million international overnight visitors, an increase from 4.7 million tourists in the first quarter of the previous year.