UAE economy likely to grow at 4.7% this year, central bank says
The UAE economy is expected to grow by 4.7 per cent this year, the Central Bank of the UAE said.
According to statistics released by the country's apex bank, gross domestic product (GDP) expanded by 3.9 per cent last year, driven by the strong performance of the oil sector and other non-oil sectors. Non-oil foreign trade of goods also increased by 13.8 per cent, exceeding Dh2.8 trillion, supported by the prominent role of the Comprehensive Economic Partnership Agreements.
According to the central bank's annual report, the banking system also continued to achieve exceptional strides in the UAE's financial indicators, with total banking sector assets reaching Dh4.56 trillion - a growth of 12.0 per cent. This places the UAE at the forefront in the Middle East in terms of banking assets, reinforcing its well-established foundations with strong fundamentals, reflected in high capitalisation levels, strong profitability, sufficient liquidity, and stable financial reserves. The insurance sector, for its part, recorded a notable increase in total gross written premiums, reaching a value of Dh64.8 billion.
The report provides a comprehensive overview and in-depth analysis of financial, monetary, and economic developments at the local, regional, and global levels, highlighting the progress made in implementing initiatives aimed at reinforcing the UAE's leading position in driving global economic development and shaping a sustainable financial future.
During 2024, the CBUAE supported capital buffers in the banking sector by increasing capital reserves, as a proactive step to address cyclical fluctuations, thereby enhancing long-term financial stability and contributing to building a strong and resilient banking system capable of adapting to global economic changes. As part of its prudential supervisory responsibilities to assess banks' ability to withstand various scenarios, the CBUAE strengthened stress tests and conducted assessments of potential risks to the banking sector due to climate change.
As a result of a diligent endeavour to establish an effective framework for combating money laundering and terrorist financing, the CBUAE's efforts, in cooperation and coordination with federal and local authorities, contributed to the UAE's exit from the Financial Action Task Force's (FATF) jurisdictions under 'enhanced monitoring process'.
As part of its leading initiatives to support the Financial Infrastructure Transformation (FIT) programme, the CBUAE launched the UAE's domestic card scheme 'Jaywan' and the instant payment platform 'Aani'. It also launched the world's first Open Finance regulation, as well as the licensing and supervision system for virtual stablecoins to enhance financial stability and keep pace with emerging changes in global markets, in addition to the electronic 'Know Your Customer' platform to provide a secure financial infrastructure for verifying customer identities.
Reflecting commitment to enhancing consumer protection and ensuring fair market conduct, the CBUAE also launched 'Sanadak', the MENA region's first independent ombudsman unit, aimed at resolving banking and insurance disputes efficiently and quickly, and enhancing consumer confidence.
Emiratisation topped the CBUAE's strategic priorities in 2024, embodying the vision and directives of the wise leadership. Licensed financial institutions exceeded their targets, achieving a growth of 152.9 per cent by employing 2,866 UAE nationals. The number of UAE nationals in vital positions also increased to 7,886, representing a growth of 20.22 per cent compared to the previous year.
In support of the national agenda aimed at promoting sustainable finance and solidifying the UAE's position as a leading hub for Islamic finance regionally and globally, the CBUAE launched the development phase of the sustainable monetary sukuk programme, with the first phase focusing on studying economic feasibility and market size.
Khaled Mohamed Balama, Governor of the CBUAE, said: 'The CBUAE continues its efforts to enhance financial and monetary stability, develop regulatory and supervisory frameworks, and lead innovation in the financial services sector. Our transformative initiatives and projects, launched during 2024, have contributed to enhancing the efficiency and competitiveness of the financial sector, building a more resilient and sustainable financial system. We will continue our diligent work to strengthen the UAE's position as a global financial hub, and build a prosperous future for the financial sector, reflecting the world's confidence in our economy and our ability to innovate and excel, and affirming our commitment to achieving sustainable development for future generations.'
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