Khaleej Times, Wed, May 08, 2024 | Shawwal 29, 1445
UAE aims to grow economy at 7% in 2024, minister says at Economy Middle East Summit 2024
Emirates:
The global challenges have tested the UAE’s resilience, but the aim is to grow
the economy at 7 per cent in 2024, said Abdulla Bin Touq Al Marri, Minister of
Economy.
The UAE has been aiming to grow 7 per cent per year in order to double its gross
domestic product (GDP) to Dh3 trillion by 2030. The UAE saw nearly 8 per cent
growth in 2022. The UAE minister earlier predicted that the economy will grow by
up to 5 per cent in 2024.
“The last three decades of low inflation and low interest rates are no longer
normal. Now we need to design an economy keeping in mind the current levels of
inflation and interest rates,” he said on the occasion of the Economy Middle
East Summit 2024, which was held at the Abu Dhabi Global Market (ADGM).
The UAE Central Bank earlier projected 4.2 per cent growth for 2024 and 5.2 per
cent for next year. The World Bank last month raised the projected growth for
UAE to 3.9 per cent for 2024 and 4.1 per cent for 2025.
The event focused on navigating the global economic landscape beyond 2024 and
emphasized the Mena region’s economic outlook amidst new global realities.
Al Marri said the UAE has made great strides in diversifying its national
economy and shifting towards a flexible economic model based on knowledge and
innovation. As a result, the non-oil sector accounts for 74 per cent of the
country’s total GDP.
“The UAE continues its efforts to provide an incubating environment for
conducting business and economic activities and develop flexible and competitive
legislation and economic policies that will enhance the country’s attractiveness
for foreign investments through establishing a suitable economic climate for
investors, capital owners, and entrepreneurs. The most notable developments in
this regard include the granting of 100 per cent foreign ownership of companies,
the modernisation of visa and residency systems, and the introduction of
self-employment and long-term residency pathways, which contribute to
strengthening the country’s ability to confront global economic changes. They
also contribute to consolidating its position as a leading destination for
business and investment,” he said.
Roberta Gatti, chief economist for Mena at The World Bank, is optimistic about
2025, anticipating that the brakes on oil production will be taken off. “The
governments in the Mena region have to work on balancing the relationship
between the public and private sectors. That would be the first step to moving
away from an informal economy.”
Gatti said the region is returning to its pre-pandemic trend of low growth, in
the context of a global economy that is decelerating for the third consecutive
year. “Mena’s GDP is forecast to rise to 2.7 per cent in 2024 from 1.9 per cent
in 2023. This outlook is marked by uncertainty, amidst the conflict in the
region and rising levels of debt. In addition, rising debt is heavily
concentrated in oil-importing economies, which now have a debt-to-GDP ratio 50
per cent higher than the global average of emerging market and developing
economies. Oil importers in Mena are borrowing against an uncertain future,”
added Gatti.
“For oil exporters, the challenge is one of economic and fiscal-revenue
diversification. This is because of the structural change in global oil markets
and the rising demand for renewable sources of energy,” he added.
Naima Al Falasi, senior vice president of portfolio strategy, Mubadala, said
Generative AI and AI are transforming all industries. “It has made an impact of
$23.5 billion in the GCC economy, that’s the benefit we will see in the region,”
said Al Falasi.
Dr. Mahmoud Mohieldin, UN Special Envoy on Financing the 2030 Agenda for
Sustainable Development and Executive Director, the International Monetary Fund,
said recent reports from the World Bank and IMF say there’s a lot to be desired
when it comes to economic recovery. “Our regional growth is lower than the
global growth numbers. While global growth has shown resilience, things are
uneven. The gap between the developed world and the rest has widened.”
While speaking during the panel discussion at the conference, Chris Williamson,
chief business economist, S&P Global Market Intelligence, added that the region
is running into supply issues because of the Red Sea situation. “Usually, this
would lead to inflation. But because we have so many suppliers here, it’s doing
a balancing act and prices are not rising the way they should.”