The economy of the oil-rich Abu Dhabi, which has proven crude oil reserve of 97 billion barrels, has recorded 10.5 percent growth in the first 9 months to a record Dh830 billion in 2022, according to a statement by Statistics Centre – Abu Dhabi (SCAD).
Non-oil sectors contributed 50.3 percent to Abu Dhabi’s Gross Domestic Product (GDP), with an increase of Dh39 billion compared to the same period in 2021 to reach Dh417.3 billion in total by the end of Q3 2022.
“Through the provision of an enabling knowledge-based economy and a resilient economic framework, Abu Dhabi continued to grow in leaps and bounds at the end of Q3 2022 across its various sectors thanks to the collaborative efforts of various government and private sector organisations. Abu Dhabi strengthened its international standing and maintained its competitiveness and macroeconomic stability, SCAD said in a statement.
Abu Dhabi has launched a number of initiatives in recent years as it focuses on diversifying its economy away from oil, promoting its non-oil economic activities, maintaining a prudent fiscal policy and progressively responding to the market needs and trends to upgrade the regulatory and legal frameworks to encourage foreign direct investment and promote its domestic investments.
In 2022, Fitch Ratings affirmed Abu Dhabi’s Long-Term Foreign-Currency Issuer Default Rating (IDR) at ‘AA’ with a Stable Outlook. The ‘AA’ rating reflects Abu Dhabi’s high GDP per capita and strong fiscal and external metrics – government debt is among the lowest of Fitch-rated sovereigns’ and sovereign net foreign assets (SNFAs) among the highest. The rating is constrained by high dependence on hydrocarbons, a fairly weak, but improving, economic policy framework and low governance indicators compared with peers’.
Ahmed Jasim Al Zaabi, Chairman of the Abu Dhabi Department of Economic Development (ADDED), said:“Abu Dhabi’s robust economy continues to prove its superiority driven by our leadership’s clear vision, its ability to attract foreign direct investments and agile policies that enabled our economy to achieve the strongest growth in the region.
“Abu Dhabi, with its world-renowned cosmopolitan lifestyle and unparalleled infrastructure, is the destination of choice for global investors and talent. The private sector plays a crucial role in supporting the economy’s continued growth, and we will continue to prioritise sustainable economic policies to broaden the investment landscape.”
Abu Dhabi’s real estate sector experienced an exponential 20.3% growth compared to the same period the previous year. The growth was due to the rise in real estate activities during the first nine months of 2022, as investors have been attracted to Abu Dhabi’s renowned waterfront and island communities, such as Saadiyat Island, Yas Island, Al Reem Island and Al Raha Gardens.
The accommodation and food services sector in Abu Dhabi achieved a growth rate of 20.2 percent in the first nine months of 2022. In Abu Dhabi’s tourism sector, hotel occupancy rates, amongst other key indicators, have reached a two-year high. In 2022, Abu Dhabi hosted a total of 4.1 million overnight hotel guests, an increase of 24 percent on the previous year. Hotel occupancy rates reached 70 percent, well above the Middle East average of 63.6 percent which makes Abu Dhabi among top tourism destinations in the region in 2022.
The robust growth is being driven by increased awareness across international and domestic markets of Abu Dhabi’s offering of entertainment and sporting events, cultural and heritage experiences, and leading international partnerships.
During the first nine months of 2022, the wholesale and retail trade sector reached AED45 billion, with a 17.4% increase compared to the same period in 2021. This sector accounted for 5.4 percent of Abu Dhabi’s nine-month GDP.
The transportation and storage sector saw an added value of Dh14 billion in the first nine months of 2022, recording a growth of 11.4 percent. This sector, which boosted the emirate’s GDP by 1.7 percent, covers the transportation of passengers and cargo via rail, road, water, or air, and related storage activities. Abu Dhabi Airports reported that the Emirate’s airports were used by a combined total of 15.9 million passengers in 2022.
The manufacturing activities in the Emirate witnessed a growth rate of 8.1 percent, with a contribution of 8. percent to the GDP during the first nine months of 2022. The manufacturing sector is expected to double in size by 2031 with the newly announced Abu Dhabi Industrial Strategy to strengthen the Emirate’s position as the region’s most competitive industrial centre. Abu Dhabi government recently announced that it will invest Dh10 billion across a number of ambitious industrial programs to more than double the size of the emirate’s manufacturing sector to Dh172 billion by 2031.
The new strategy will boost Abu Dhabi’s trade with international markets, with the aim of increasing the Emirate’s non-oil exports by 143 percent to Dh178.8 billion by 2031.
Abu Dhabi’s financial sector grew by 6.9 percent in the first nine months of 2022 compared to the same period in 2021, with a value of Dh28 billion. The sector accounted for 5.5% of the GDP.
The growing confidence of the international community and the economic growth potential has made Abu Dhabi a preferred destination for investors, businessmen, entrepreneurs, innovators, and other professionals from different parts of the world to the “Capital of Capital”.
Also published on Medium.
