OPEC Forecasts Robust Economic Performance for UAE in 2023

OPEC Forecasts Robust Economic Performance for UAE in 2023

The Organisation of the Petroleum Exporting Countries (OPEC) has projected a strong trajectory for the UAE’s economy in 2023, building upon its impressive growth of 7.9 percent year-on-year recorded in 2022.

In its August Monthly Oil Market Report, OPEC outlined that the UAE’s robust economic performance will be underpinned by consistent contributions from the non-oil sector, particularly from key segments like tourism, leisure, and real estate.

The report highlighted that the UAE’s Global Purchasing Managers’ Index (PMI) remained nearly unchanged in July, registering at 56, a minor shift from 56.9 in June and 55.5 in May. This steady PMI indicates the continuation of an expansionary trend.

Furthermore, the UAE’s real estate market continues to display upward momentum, with notable growth in overall property transactions during the first half of 2023. This surge significantly impacted residential property prices in Dubai, which observed a year-on-year increase of 16.9 percent as of June, as reported by REIDIN.

The Central Bank of the UAE (CBUAE) mirrored the US Federal Reserve’s decision to increase interest rates by 25 basis points in July. This move elevated the key-policy rate to 5.4 percent, marking a cumulative rise of 525 basis points in slightly over a year. As a result, the short-term interest rate is nearing levels not seen since before the global financial crisis.

OPEC’s positive outlook for the UAE’s economy in 2023 underscores the nation’s resilience and strategic focus on diversification and sustainable growth, bolstered by strong performances in key sectors and prudent monetary policy decisions.

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