The UAE economy is poised for its strongest growth in 11 years after growing 8.2% in the first quarter

The UAE’s economy is expected to post its strongest annual expansion since 2011 after growing 8.2 percent in the first three months of this year on higher oil prices and measures to mitigate the impact of the Covid-19 pandemic.

First-quarter growth was driven by a sharp rise in oil production as well as a notable improvement in real non-oil gross domestic product, the UAE’s central bank said in its latest 2022 quarterly economic report.

The Arab world’s second largest economy, which grew 3.8 percent in 2021, is expected to grow 5.4 percent and 4.2 percent in 2022 and 2023, respectively, according to the regulator’s latest forecasts.

The IMF expects the UAE’s economy to grow 4.2 percent this year, while Emirates NBD forecast growth of 5.7 percent and Abu Dhabi Commercial Bank (ADCB) forecast growth of 6 percent, supported by a sharp rise in the oil sector.
A 6 percent expansion would be the highest since 2011, when the economy grew 6.9 percent.

The ADCB recently upgraded its growth estimates, “due to stronger oil sector growth prospects, Opec+ plans to bring forward production increases along with expectations that the UAE will continue to increase oil production from September,” said chief economist Monica Malik.
Edward Bell, senior director of market economics at Emirates NBD, said the lender also expects oil production to continue to rise as Opec+ production ramps up and the UAE invests more in upstream capacity, both for oil and natural gas .

There’s a higher likelihood of stronger growth here, the central bank said, as a result of oil production, higher prices and government initiatives to double the size of the manufacturing sector by 2031.
Source: The National News