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The UAE economy is projected to grow by 7.6% this year, driven by both oil and non-oil sectors, the country's central bank estimates. This compares with the mid-year forecast of 5.4% for 2022.
For 2023, overall real gross domestic product (GDP) is projected to grow by 3.9%, the Central Bank of the UAE (CBUAE) said in its latest quarterly economic review on Tuesday.
"There are increased chances for growth being stronger in 2022 due to mainly better-than-expected performance in some of the non-oil sectors such as tourism and hospitality, real estate, transportation and manufacturing," the report noted.
Last October, International Monetary Fund (IMF) projected the UAE's GDP to grow 5.1% this year, revising the previous estimate of 4.2%.
The UAE central bank said real oil GDP is projected to grow by 11% and 3% in 2022 and 2023, respectively. However, this will depend on the evolution of the Russia-Ukraine conflict, potential global economic slowdown, further OPEC+ decisions on production levels, potential reduction in output by some of the other OPEC members and further post-COVID recovery, it added.
The UAE's oil production in Q3 averaged 3.17 million barrels per day, with the hydrocarbon GDP estimated to have grown 13%, the report said. The OPEC oil producer has benefitted from the steep rise in oil prices following the Russian invasion of Ukraine.
For the non-oil sector, the bank projects growth of 6.1% and 4.2%, respectively. "After another significant rise in the non-hydrocarbon sector in Q2 2022, the sector is estimated to have grown compared to a year ago slightly less in Q3."
The sector benefited from the removal of most COVID-19 related restrictions and from the recovery in global travel and tourism, the booming real estate and construction sectors, expanding manufacturing activities and from world class events, such as the FIFA World Cup in Qatar in Q4 2022, the report noted.
CBUAE also revised its projection for the UAE headline inflation downwards to 4.9% in 2022, as oil and food prices moderate.
(Reporting by Brinda Darasha; editing by Cleofe Maceda)
