Lower oil output to slow down #UAE real GDP growth to 3.9% in 2023

Lower oil output to slow down UAE real GDP growth to 3.9% in 2023

The UAE’s real gross domestic product (GDP) growth is forecast to decelerate to 3.9% in 2023, primarily due to lower oil production and more moderate growth in the non-oil sector, the Central Bank of UAE (CBUAE) said in its Financial Stability Report 2022.

The oil and non-oil GDP will rise by 3.0% and 4.2%, respectively, this year, the central bank said in the report released on Thursday.

The real GDP increased by 7.9% in 2022, compared to 4.4% in 2021, driven by a 7.2% increase in non-oil sector GDP and a 9.5% expansion in oil-sector GDP.

The UAE was one of the fastest-growing economies last year, boosted by the removal of most COVID-19-related restrictions and a recovery in global travel and tourism, real estate and construction and manufacturing sectors.

In addition, the growth was supported by improved activity associated with global events such as the Dubai EXPO and FIFA World Cup in Qatar.

“The UAE financial system continues to be strong and resilient in its ability to serve the local economy,” the report stated.

The macro-financial cycles remained stable, with no clear evidence of credit overheating and a trend towards a neutral position last year, CBUAE added.

Funding structure and private credit growth in the UAE banking system remained healthy, with resident deposit growth outpacing credit growth.