UAE's non-oil sector grows by 3.4%

The UAE economy grew by 3.4 per cent in the first quarter of the year, with a strong performance by the non-oil sector driving the expansion.

The country’s real GDP reached Dh430 billion ($117 billion) during the January to March period, the Ministry of Economy said on Monday, quoting preliminary estimates from the Federal Competitiveness and Statistics Centre. The non-oil sector expanded by 4 per cent year on year during the quarter, led by financial and insurance activities, which grew by 7.9 per cent.

The UAE, the Arab world's second-largest economy, has been focusing heavily on diversifying its economy away from oil by developing sectors such as technology, manufacturing, tourism, trade and innovation. The country has introduced several reforms including longer-stay residence visas as well as new visa categories to attract more talent.

Its non-oil foreign trade hit a record Dh1.4 trillion in the first six months of this year as it continues to forge closer trade ties with partners around the world.

In the first quarter of this year, the non-oil sector received a boost from the transport and storage industry, which grew by 7.3 per cent, the Ministry of Economy said. This growth was driven by the "notable increase" in the number of people passing through the country's airports, which reached 36.5 million during the first three months of this year, up 14.7 per cent annually.

Construction and building activities grew 6.2 per cent in line with the "several development projects initiated by the UAE government in early 2024", the ministry said. They saw a "substantial rise" in the government’s public capital expenditures, reaching Dh4.8 billion.

The UAE is predicted to be the 10th biggest recipient of inbound tourism spending globally this year, the World Travel and Tourism Council said last week. International visitors to the UAE will spend an estimated $52.2 billion in the country this year, up 9.4 per cent annually, the tourism body said in a report.

Overall, trade made the largest contribution to the UAE's non-oil GDP in the first quarter, accounting for 16.1 per cent, the Ministry of Economy said. It was followed by manufacturing (14.6 per cent), financial and insurance activities (13.4 per cent), construction and building (11.8 per cent) and real estate (7.1 per cent).