UAE on Track to Record Strongest Annual GDP Growth in Over a Decade
The latest in a series of quarterly economic reports released by Majid Al Futtaim, the leading shopping mall, communities, retail and leisure pioneer across the Middle East, Africa and Asia, reveals the UAE economy is on track to record its strongest annual GDP growth since 2011.
The Oxford Economics is predicting growth of 6.8% for 2022 – a significant increase in the recorded actual growth of 3.8% in 2021.
According to the Q3 2022 State of the UAE Retail Economy report, the oil and non-oil sectors both played essential roles – with the biggest GDP driver being the oil sector, which saw a 13.4% increase driven by crude oil prices hovering around USD 100 per barrel for most of the third quarter.
The non-oil economy also demonstrated robust growth, buoyed by the Government’s moves to create an investor-friendly environment, with a strong focus on both digital and creative industries, the results of which are reflected in the S&P Global UAE Purchasing Managers’ Index – which hit a three-year high in August.
While inflation remains top of mind for many consumers, there has been a decrease in the level of concern over the quarter, with 92% of residents still expressing some concern but saying they are adjusting to the new norm by practising caution in their purchasing.
This is evidenced by the economic data showing that increasing results are being achieved across all key sectors of the economy.
The sharp rise of e-commerce continues, with sales projected to rise by 22% this year, exceeding $6 billion and putting the market on track to reach USD 9.2 billion by 2026.
Spending in this area increased 34% in January-September compared with the same period a year earlier, with sales now accounting for 11% of total retail economy sales.
The UAE’s strong economic indicators and investment-focused policy updates continue to attract international interest, while the ESG agenda continues to increase in public and private sectors' strategic viewpoints.
The introduction of the new laws has seen plastic bag usage at Majid Al Futtaim retail outlets fall by 85% in the first three months, despite a 10% increase in customer visits. Reaching net zero by 2050 will put the UAE ahead of nearly every other nation in the region.
The outcome is a robust and resilient retail economy, and a real estate market has defied global economic gravity.
Alain Bejjani, Chief Executive Officer at Majid Al Futtaim – Holding, said: “Another strong quarter for the UAE retail economy showcases notable sector-wide resilience and reinforces the country’s steady march towards a return to sustainable growth.
"The continuation of forward-thinking government initiatives underpinning this progress is making the UAE highly attractive to international businesses – as are the Government’s steps to become a sustainability leader in the MENA region."