UAE to double size of economy in a decade
▶ Minister says Fourth Industrial Revolution technology key to recovery
The UAE aims to double the size of its economy over the coming decade, Economy Minister Abdulla bin Touq said on Saturday.
Mr bin Touq said his ministry and other government entities are “working according to an ambitious vision” to achieve a gross domestic product of Dh3 trillion by 2031.
The country is pressing forward to hasten its economic recovery by embracing technology linked to the Fourth Industrial Revolution, he said.
The UAE’s economy is set to grow by 2.5 per cent this year while its non-oil economy will grow by 3.6 per cent, according to estimates from the Central Bank. The economy is forecast to expand by 3.5 per cent next year while non-oil growth will rise to 3.9 per cent.
Last year, GDP stood at about Dh1.42tn at constant prices, with non-oil GDP making up about Dh1tn of this.
The country was “not immune” to the global economic shock experienced after Covid-19, given that its economy “is linked through foreign trade, foreign investment, tourism and the logistical sector with the movement of trade and investment and global transport”, said Mr bin Touq.
Preliminary results from the UAE’s Federal Statistics and Competitiveness Centre showed that the country’s economy shrank by 6.1 per cent last year while non-oil GDP contracted by 6.2 per cent, which the ministry described as a “comparatively low decline” given the slump in other major global economies.
The euro area economy shrank by 6.6 per cent last year, with France contracting by 8.2 per cent and Italy by 8.9 per cent, according to the latest data from the International Monetary Fund. The UK economy shrank by 9.9 per cent. Overall, advanced economies contracted by 4.7 per cent and the US by 3.5 per cent.
“We expect to see a rebound in non-oil activity supported by the domestic vaccination programme and the limited [Covid-19] restrictions. Key externally facing sectors should also see a pickup in activity, though Covid waves in key sources of tourism into the UAE will remain headwinds,” said Monica Malik, chief economist at Abu Dhabi Commercial Bank.
“Progress with global vaccinations will be essential for the recovery in sectors such as tourism and aviation.”
Although there is still fluidity in the global economy, with the surge in Covid-19 infections making the outlook uncertain for travel and tourism, “when a recovery does take hold, it is likely to be strong”, said Scott Livermore, chief economist at Oxford Economics.
“The surge in travel to Dubai [at the end of last year] illustrates the willingness of travellers to spring back. This also bodes well for the success of the delayed Expo 2020, which creates an opportunity for a faster recovery in Dubai,” he said.
The UAE’s plan to increase oil production to 5 million barrels per day, from about 2.8 million bpd last year, “will make a significant contribution” towards boosting the country’s GDP over the coming decade.
Other policies aimed at supporting long-term growth, such as the Operation 300bn initiative announced by the Ministry of Industry and Advanced Technology in March, will also play their part, said Mr Livermore.
Operation 300bn, backed by the Emirates Development Bank, is a plan to increase industry’s contribution to GDP from Dh133bn to Dh300bn by 2031.
This involves the creation of 13,500 companies in the sector and an increase in industrial research and development spending from 1.3 per cent to 2 per cent of GDP by 2031.