ABU DHABI, September 26, 2023 (WAM) — The UAE financial system is predicted to develop by 3% in 2023 and 4% in 2024, pushed by the non-oil sector, which is predicted to learn from sturdy development in tourism and authorities initiatives and technological developments, S&P stated.
In statements to the Emirates Information Company (WAM), analysts from the ranking company underlined the UAE authorities’s complete implementation of financial and social initiatives lately. These initiatives are strategically designed to pave the best way for long-term sustainable financial growth.
S&P analysts additionally anticipate continued development inside the UAE’s strong tourism sector. The nation’s capability to host main worldwide occasions is predicted to play a vital position in reaching the UAE’s bold goal of attracting 40 million guests by 2030, accompanied by plans to broaden the variety of resort rooms over the identical interval as much as 250,000.
Analysts anticipate the UAE’s banking sector to stay strong, with profitability enhancing above pre-pandemic ranges on account of rising rates of interest. Dubai’s actual property sector can be anticipated to grow to be extra versatile, with steady home costs supported by sturdy demand.
Trevor Cullinan, sovereign scores analyst at S&P, stated the UAE financial system is predicted to develop 3% in 2023, pushed by the non-oil sector. He added that the financial system is predicted to develop by 4% in 2024, supported by each the oil and non-oil sectors. Cullinan highlighted key contributors to the nation’s financial development, together with oil and fuel, wholesale, industrial, actual property, building, monetary providers and tourism.
He expects the non-oil financial system to be strengthened by the inflow of expats and vacationers, in addition to constructive sentiment from traders, shoppers and the non-public sector. That is in step with the ‘We Are the Emirates 2031’ imaginative and prescient, which goals to extend commerce quantity and tourism’s share of GDP by collaboration between authorities companies, establishments and the non-public sector to advance the event course of.
Cullinan identified that the UAE authorities has applied a variety of business and social initiatives lately which can be anticipated to spice up long-term financial development. These initiatives embrace permitting 100% direct overseas possession in additional than 1,000 industrial and industrial actions, introducing an insolvency regulation to assist people going through monetary difficulties reorganize their money owed and re-borrow on favorable phrases , enhancing the UAE’s competitiveness when it comes to ease of doing enterprise, introducing new visas, together with the Golden Residence Visa, the Inexperienced Residence Visa and multiple-entry vacationer visas, which is able to appeal to expert employees and vacationers to the UAE .
Cullinan stated the UAE’s latest initiatives to develop the yield curve denominated within the UAE dirham by the launch of presidency bonds and devices denominated within the native forex will result in the event of native capital markets and the sources of financing for corporations and banks within the UAE will broaden. .
He additionally famous that the UAE’s implementation of the company tax system will assist diversify authorities revenues away from the oil sector and modernize the UAE’s enterprise atmosphere.
Tatiana Lysenko, chief rising markets economist at S&P, anticipated the growth of the tourism sector would assist higher financial development within the UAE. She famous that the Emirate of Dubai managed to draw 14.7 million worldwide guests in 2022, double what was achieved in 2021. This means that this yr’s customer numbers could return to 2019’s peak of 16.7 million guests in 2023. Additionally in 2022, Dhabi attracted 4.1 million resort friends, a rise of 24% in comparison with 2021.
Leskova expects the UAE’s tourism sector to proceed to develop, supported by repeatedly internet hosting distinguished occasions such because the Convention of the Events to the United Nations Framework Conference on Local weather Change (COP28). This development is predicted to assist the UAE obtain its purpose of accelerating the variety of guests to 40 million by 2030, with the variety of resort rooms reaching 250,000 in the identical interval.
Leskova additionally expects that the emirates of Abu Dhabi and Dubai will proceed to paved the way in attracting enterprise and tourism to the nation, whereas different emirates comparable to Ras Al Khaimah and Sharjah look to advertise their tourism sectors. This may enhance the diversification of the nation’s tourism providing, particularly for the reason that Emirate of Sharjah is a showcase for Arab and Islamic tradition and a protected household vacation spot, whereas the Emirate of Ras Al Khaimah is understood for its scenic nature, leisure actions and genuine performances.
Tatiana Leskova expects Dubai’s actual property sector to point out extra flexibility and home costs to stabilize in gentle of sturdy demand. She additionally notes that Dubai’s attractiveness to companies is obvious from the rise within the variety of new industrial licenses.
Mohamed Damak, senior director and world head of Islamic Finance at S&P, stated the UAE banking sector stays sturdy, with profitability anticipated to enhance and exceed pre-pandemic ranges on account of rising rates of interest and technological developments. He additionally expects the capitalization of the UAE banking system to stay sturdy, supported by improved inner capital technology, good financing and liquidity situations, and a powerful web exterior asset place, which is able to shield it from the pressures of declining world liquidity and rising prices.
