The Organization of the Petroleum Exporting Countries (OPEC) has projected a continued robust performance for the UAE’s economy in 2023, building upon its impressive 7.9 percent year-on-year growth in 2022.
OPEC’s latest Monthly Oil Market Report for August underscores this anticipated strong economic performance, driven in significant part by consistent contributions from the non-oil sector. Notably, sectors like tourism, leisure, and real estate are expected to play pivotal roles in sustaining this positive trajectory.
The country’s Global Purchasing Managers’ Index (PMI) remained remarkably steady in July, maintaining its level at 56, following a strong reading of 56.9 in June and a previous level of 55.5 in May. This suggests a persistent expansionary trend that is likely to endure.
Simultaneously, the UAE’s real estate market continues its upward surge, as evidenced by a substantial increase in overall property transactions during H1’23. This trend has significantly impacted residential property prices in Dubai, which witnessed an impressive year-on-year rise of 16.9 percent as of June, according to data from REIDIN.
Adding to this economic landscape, the Central Bank of the UAE (CBUAE) mirrored the US Federal Reserve’s move by implementing a 25 basis point increase in interest rates in July. As a result, the key-policy rate now stands at 5.4 percent, marking a total uptick of 525 basis points in a span of just over a year. This notable rise brings the short-term interest rate close to its highest level since before the global financial crisis.
In conclusion, the UAE’s economy is poised to build upon its recent growth momentum, with a diversified range of sectors contributing to its resilience. The ongoing positive performance is underscored by indicators such as the PMI and the thriving real estate market. Furthermore, the Central Bank’s proactive interest rate adjustments demonstrate a commitment to maintaining a stable economic environment.