Abu Dhabi: The UAE economy is forecast to grow 3 per cent in 2023 and 4 per cent in 2024, driven by the non-oil sector, which is expected to benefit from strong growth in tourism, government initiatives, and technological advancements, according to S&P.

In statements to the Emirates News Agency (WAM), analysts at the credit rating agency underscored the UAE government’s comprehensive implementation of economic and social initiatives over the past few years.

S&P analysts also anticipate continued growth within the UAE’s robust tourism sector. The country’s ability to host major international events is expected to play a pivotal role in achieving the UAE’s ambitious goal of attracting 40 million visitors by 2030, accompanied by plans to expand the number of hotel rooms to 250,000 during the same period.

Analysts expect the UAE banking sector to remain robust, with profitability improving beyond pre-pandemic levels due to rising interest rates. The Dubai real estate sector is also expected to become more flexible, with stable housing prices supported by strong demand.

Trevor Cullinan, sovereign ratings analyst at S&P, highlighted the key contributors to the country’s economic growth, including oil and gas, wholesale trade, industry, real estate, construction, financial services, and tourism.

Experts expects the tourism sector in the UAE to continue growing, supported by the regular hosting of prominent events such as the Conference of the Parties to the United Nations Framework Convention on Climate Change (COP28). This growth is expected to help the UAE achieve its goal of increasing the number of visitors to 40 million by 2030, with the number of hotel rooms reaching 250,000 during the same period.

Analysts also expect the emirates of Abu Dhabi and Dubai to remain at the forefront of attracting business and tourism to the country, while other emirates such as Ras Al Khaimah and Sharjah are working to promote their tourism sectors. This will increase the diversification of tourism offerings in the country, especially since the emirate of Sharjah is a showcase for Arab and Islamic culture and a safe family destination, while the emirate of Ras Al Khaimah is known for its picturesque nature, entertainment activities, and authentic shows.

Mohamed Damak, senior director and global head of Islamic finance at S&P, said that the UAE banking sector remains strong, with profitability expected to improve and exceed pre-pandemic levels due to rising interest rates and technological advancements. He also expects the capitalisation of the UAE banking system to remain strong, supported by improved internal capital generation, good financing and liquidity conditions, and a strong net external assets position, which will protect it from the pressures of declining global liquidity and rising costs.

Source: https://gulfnews.com/business/economy/uae-economy-to-grow-3-in-2023-4-in-2024-sp-1.98357451