The Central Bank of the UAE (CBUAE) projects real overall output growth to rebound to 3.9% in 2024, driven primarily by strong growth in the non-oil sector.
The non-oil sector is expected to grow 5.4% during the year, according to the CBUAE’s 2023 Annual Report.
“With global growth projected by the IMF to remain steady at 3.1% in 2024, the UAE’s expected outperformance shows a resilient economy amidst a still subdued global backdrop,” the regulator said.
Foreign trade
Foreign trade also significantly contributed to the UAE’s economic performance, with non-oil exports and re-exports increasing by 12.3% to Dh756 billion, driven by increased shipments of gold, diamonds and telecommunications equipment.
During the reporting period, non-oil exports increased by 12.4% compared to the same period in the previous year, amounting to Dh299 billion.
The most exported non-oil goods were gold, which accounted for 39.7% of the total non-oil exports, followed by aluminium at 6.5%, and petroleum oils and oils obtained from bituminous minerals at 6%. Re-exports also grew in the first three quarters of the year by 12.2% year-on-year, reaching Dh457 billion.
Telecommunications equipment and diamonds dominated re-exports, accounting for 17.5% and 12.3% of the total, respectively.
Imports increased significantly by 16.9% year-on-year in the first nine months of 2023 compared to the same period in 2022, reaching Dh1.01 trillion. This increase was supported by robust growth in the non-oil sector and a slight appreciation of the currency vis-à-vis trading partners.
Gold topped the list of the most imported goods, accounting for 19.2% of imports, followed by telecommunications equipment (9.8%), motor vehicles (6.4%), and diamonds (5.2%).
Financial sector overview
The UAE’s financial sector demonstrated strong performance, benefiting from elevated interest rates and enhanced economic activities. The financial services industry recorded an 11.1% growth in total assets, surpassing Dh4 trillion. The banking system saw substantial growth, supported by appropriate capitalisation, strong profitability, and sufficient liquidity.
Significant progress was made in financial crime supervision, with the CBUAE conducting 247 prudential examinations in 2023, up from 181 in 2022. This underscores the importance of a robust regulatory framework to combat financial crimes. Climate-related risks were incorporated into the regulatory and supervisory framework for licensed financial institutions for the first time. The CBUAE’s enhanced efforts in financial crime supervision contributed to completing the action plan agreed with the Financial Action Task Force (FATF) and the UAE’s exit from FATF’s enhanced monitoring process.
“In the area of anti-money laundering and countering the financing of terrorism (AML/CFT), in February 2024, the Financial Action Task Force (FATF) recognised the UAE’s strengthening of its frameworks in line with international best practice,” said HH Sheikh Mansour bin Zayed Al Nahyan, Vice President, Deputy Prime Minister and Chairman of the Presidential Court, and Chairman of the Central Bank of the UAE (CBUAE). “As part of our commitment to safeguard the integrity of the UAE’s financial system, we will continue to work closely with other global central banks and relevant international authorities to uphold global AML/CFT standards.”
Consumer protection also saw notable enhancement with the issuance of the Ombudsman Regulation in 2023, leading to the creation of Sanadak, the first independent financial ombudsman unit in the MENA region. Sanadak is tasked with addressing complaints from consumers of banking and insurance institutions, underscoring the CBUAE’s commitment to fostering a fair and transparent financial system.
“Marking its GoldenJubilee in 2023,the progress the CBUAE has delivered againstits mandate provides further impetus to our robust fifty-year journey,” said HE Khaled Mohamed Balama, Governor of the CBUAE. “This includes our focus on implementing innovative projects as part of the FIT programme with the aim of transforming the financial sector.”
