The contribution of the non-oil sector to the UAE’s economy surged to 72.3 per cent in 2021, up from 71.3 per cent in 2020, underscoring the impact of the country’s ambitious diversification drive aimed at propelling the size of the economy to Dh3 trillion by 2030.
The overall gross domestic product of the second-largest Arab economy for 2021 at constant prices increased 3.8 per cent to Dh1.489 trillion at a growth rate exceeding the estimates of international institutions, data by the Federal Competitiveness and Statistics Centre revealed on Tuesday.
“While international organisations expected our national economy to grow by 2.1 per cent, we achieved a growth rate of 3.8 per cent in 2021 (higher than the growth of 2019). This is the highest growth in the region with our GDP reaching Dh1.489 trillion at current prices,” His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, said early this month when the GDP growth data was released.
“In a turbulent and changing world, the UAE has been moving steadily forward. Our economy is growing, our journey is accelerating, our competitiveness is advancing upwards, our future is going to be promising, and we assure our people that the best is yet to come,” Sheikh Mohammed has said.
On Monday, the International Monetary Fund (IMF) revised upward the economic growth outlook for the UAE in 2022 to 4.2 per cent in 2022 — up from its previous forecast of 3.5 per cent. The latest IMF projection is in line with the bullish forecast made by the Central Bank of the UAE for 2022. In 2023, the UAE is projected to grow 3.8 per cent, the latest data released by IMF’s World Economic Outlook shows.
The hotels & restaurants, wholesale & retail and health & social services sectors contributed 21.3 per cent, 14.1 per cent and 13.8 percent respectively, during the year.
Central to the diversification drive is the UAE’s landmark ‘Projects of the 50’ initiative, which was unveiled to mark the nation’s 50th National Day in 2021. Projects of the 50, a series of developmental and economic undertakings, has been designed to propel the UAE to a higher growth orbit aimed at more than doubling the size of its economy to Dh3 trillion by 2030. It will also be pivotal in the nation’s efforts to attract over $150 billion in foreign direct investment in the next ten years.
A key driver of the diversification drive is the non-oil foreign trade, which jumped 27 per cent in 2021 to nearly Dh1.9 trillion, compared to 2020, and 11 per cent over 2019. The value of non-oil exports amounted to about Dh354 billion, a growth of 33.3 per cent as compared to 2020 and 47.3 per cent as compared to 2019.
Key economic projects and plans announced by the UAE in 2021 as part of its blueprint for the next 50 years of growth included an industrial strategy to boost the sector’s contribution to national GDP to Dh300 billion, compared to the current Dh133 billion, and a plan aimed at doubling foreign trade value to Dh3 trillion during the same period, an increase of Dh1.5 trillion, in addition maintaining an annual economic output exceeding Dh1.5 trillion and investing nearly Dh600 billion in renewable energy to achieve climate neutrality by 2050.
Real non-oil GDP up by 7.8% in Q4
Meanwhile, the Central Bank of the UAE said real non-oil GDP grew by some 7.8 per cent in the fourth quarter of 2021 due to the easing of business closures and the decline in restrictions on international travel.
The central bank also highlighted a 9.3 per cent annual increase in Emirati oil production during the same period in line with a related Opec+ agreement.
In addition, according to the central bank’s quarterly economic report, the occupancy rate of hotels in Dubai during the fourth quarter of 2021 was 82 per cent, compared to 63 per cent and 80.6 per cent during the same period in 2020 and 2019, respectively.
The report also addressed local and international economic and monetary developments and stock markets, and highlighted that the UAE is continuing to lead the efforts aimed at addressing the Covid-19 pandemic, which is positively reflected in its pace of recovery.
At the end of the fourth quarter of 2021, about 92 per cent of those eligible were fully vaccinated, and 100 per cent have received at least one dose of the vaccine, the report stated, while referring to a 9.3 per cent year-on-year increase in oil production, in line with the Opec+ agreement.
The central bank estimated a total real GDP growth of 2.3 per cent in 2021, and for 2022 it is maintaining its forecast for an aggregate real GDP growth of 4.2 per cent, with non-oil real GDP increasing by 3.9 per cent and real oil GDP by five per cent.
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