ABU DHABI - Abu Dhabi's financial sector is forecast to grow 13% in 2023, a senior official said on Monday, as efforts to diversify the Gulf city-state's economy gather pace.
Dubai is the more established financial centre in the United Arab Emirates (UAE) whereas Abu Dhabi holds the majority of the UAE's oil reserves. However, Abu Dhabi has accelerated investments to develop non-oil sectors such as financial services, manufacturing and industry, and tourism as part of its economic transition strategy.
Non-oil growth in Abu Dhabi surged to 12.3% in the second quarter from a year earlier, vastly outperforming overall economic growth which was weighed down by cuts to crude production and lower oil prices. Non-oil activities now account for just over 50% of Abu Dhabi's GDP.
"The financial sector, a cornerstone of our economy's diversification... is expected to continue its upward trajectory with an annual growth of 13% in 2023," Ahmed Al Zaabi, chairman of Abu Dhabi's Department of Economic Development, said during Abu Dhabi Finance Week (ADFW).
Abu Dhabi's financial centre, the Abu Dhabi Global Market (ADGM), announced in May it will expand its geographical area of jurisdiction by 10 times, part of a push to make the sector a major economic contributor.
The UAE is vying with a rapidly opening Saudi Arabia to be the go-to destination for economic activity in a region planning a transition away from oil.
Economy Minister Abdulla bin Touq Al Marri said he expects the UAE's growth momentum, with non-oil growth at almost 6% in the first half of 2023, to continue for the rest of the year, driven by various factors including the hosting of COP28, the UN's climate conference, which kicks off on Nov. 30.
"Investment in new economic sectors and emerging industries is paramount to the UAE's commitment to sustainable growth and diversification," Marri said, at the same event.
(Reporting by Rachna Uppal; Editing by Susan Fenton)