AMF forecasts 4.2% growth for UAE economy in 2023

The UAE’s economic growth is expected to remain robust, averaging 4.6 percent from 2022 to 2024, driven by higher oil prices and improved business confidence, according to the Arab Monetary Fund (AMF). The AMF’s “Arab Economic Outlook Report” forecasts a 4.2 percent growth rate for the UAE in 2023, accompanied by a decline in the consumer price index to 2.9 percent in 2023 and 2.57 percent in 2024.

With stable oil and gas prices and lower prices for basic goods, such as agricultural products, the report projected a 3.4 percent growth for Arab economies, accompanied by tighter monetary policies to curb inflation.

The report also showed that Arab countries with economic reform programmes and strategies to diversify their economies, improve their resilience, enhance their business environments, empower the private sector and invest in human capital are more able to cope with economic shocks.

According to the report, the economic growth rate of Arab countries will rise to 4 per cent in 2024, mainly due to the expected stability of oil and gas prices, basic goods prices, and controlled inflation.

Higher energy prices will boost the economic growth of major Arab oil exporters in 2023 and 2024, with their economies expected to grow by 3.4 percent in 2023 and by 4.2 percent in 2024, the report stated.

Gulf Cooperation Council (GCC) countries have a positive outlook for 2023, with an expected GDP growth of 3.4 per cent, mainly due to their efforts to diversify their sources of income, the report added, noting that oil prices are likely to remain stable and high, resulting in higher oil revenues and improved financial outcomes, foreign exchange reserves and fiscal positions.

The report stressed that promoting workforce localisation and increasing the participation of citizens in the private sector is another key approach to achieving growth in GCC countries, most notably in the UAE, Saudi Arabia and Bahrain.

According to the AMF report, Arab countries that import oil will see their growth rate increase from 3.1 percent in 2023 to 4 percent in 2024, after inflation is controlled by the end of this year and monetary policies are eased.

Various international organisations had different estimates for global economic growth in 2023 and 2024, ranging from 1.7 percent to 2.9 percent for 2023 and from 2.7 percent to 3.1 percent for 2024, the report stated.

Meanwhile, the Ministry of Industry and Advanced Technology (MoIAT) and MEXT signed a memorandum of understanding (MoU) to implement the UAE’s Industrial Technology Transformation Index (ITTI) and deploy the index overseas for the first time.

The move is part of the UAE’s efforts to accelerate decarbonisation and digitalisation within the global manufacturing sector.

First implemented in the UAE in February in line with the UAE Net Zero by 2050 strategic initiative, the ITTI will soon be deployed in the wider region following the MoU which was signed on the sidelines of the ‘Make it in the Emirates Forum’ on Wednesday by Tariq Al Hashmi, Director of Technology Adoption and Development at MoIAT, and Efe Erdem, Executive Director of MEXT, in the presence of Omar Suwaina Al Suwaidi, Under-Secretary of MoIAT.

Based in Türkiye, MEXT supports industrial companies along their digital and green transformation journey towards Industry 4.0. MEXT is the Technology and Innovation Centre of the Turkish Employers’ Association of Metal Industries (MESS) and it includes an ecosystem of more than 50 globally recognised technology providers, universities, and institutions.

Launched under the Technology Transformation Programme by MoIAT and the Abu Dhabi Department of Economic Development (ADDED), the ITTI is a comprehensive framework to measure the digital maturity and sustainability of factories and formulate a roadmap for industrial transformation.

Sarah Al Amiri, Minister of State for Public Education and Advanced Technology, said that this partnership will pave the path for the ITTI to be implemented in the wider region, representing a significant step in the UAE’s efforts to help accelerate the decarbonisation of the global manufacturing sector. “By implementing the index with our strategic partners at MEXT, MoIAT is driving digitalisation and sustainable industrial development in the region in line with our role as a champion of 4IR, advanced technology, digital transformation and innovation.”

Al Amiri added, “We know that the decarbonisation of industry must be an inclusive and global effort. That is why the UAE is committed to creating enablers that support industries around the world to harness advanced technologies and enhance efficiency. We are actively seeking to engage countries and partners that share our ambition to transform industry through digitalisation and sustainable practices.”