Transport and Communications to drive GDP growth over next 5 years
The UAE is forecast to achieve an average real GDP growth rate of 3.8% between 2019 and 2023, supported by an increase in investment flows and private consumption, according to new analysis from Dubai Chamber of Commerce and Industry.
Momentum behind the UAE’s GDP growth over the next 5 years will likely be led by the country’s transport and communication sector which is set to record GDP growth of 7.9%, followed by construction (4.2%), and real estate and business services (3.8%).
The findings of the analysis, based on the Dubai Chamber UAE Macroeconomic Model, were revealed during a business seminar recently hosted by Dubai Chamber which examined growth projections for the UAE and global economies, Dubai’s top export markets, and the most attractive export opportunities for Dubai traders.
The analysis identified other key factors that are expected to drive economic activity in the UAE, including expansionary fiscal policy and a growing number of infrastructure and construction investments in the run up to Expo 2020.
A recovery in private consumption and sales of highly cyclical consumer products is expected, extending to products such as vehicles, furniture, household appliances, and medical equipment. Meanwhile, robust growth in investment is projected on the back of government fiscal stimulus.
Real GDP for the UAE’s non-oil sector is projected grow by an average of 4.1% between 2019-2023, compared to the 2.8% accounted for in the 2014-2018 period.
In addition, recent measures to reduce cost of doing business in the UAE are expected to support activity within the country’s SME and private sectors in the near future.
The Middle East and North Africa accounts for the largest share of Dubai’s exports (41%), followed by “Emerging Asia” with 26%, Sub-Sahara Africa (18%), CIS (1%) and Latin America (0.8%), trade data for the first nine months of 2018 revealed.
Chemicals and allied products was the top-performing product category for Dubai’s exports to Asia, which includes perfumes and cosmetics, and fluorides of aluminium.
Within Sub-Sahara Africa and Latin America, wood pulp and paperboard was the top category for Dubai exports, while vegetable oils dominated the emirate’s exports to the CIS region.