UAE’s Economy to Continue Its Robust Performance in 2023: OPEC

The Organization of the Petroleum Exporting Countries (OPEC) forecast that the UAE’s economy will continue its robust performance in 2023, after recording a growth of 7.9% year-on-year in 2022. According to OPEC's Monthly Oil Market Report for August, this robust performance will be delivered through constant contributions from the non-oil sector, especially from tourism, leisure and real estate. The report revealed that the country's Global Purchasing Managers’ Index (PMI) was almost unchanged in July, standing at 56, following 56.9 in June and compared to a level of 55.5 in May. This suggests that the expansionary trend will be maintained.

Meanwhile, the UAE's real estate market remains on an upward trajectory, the report further showed, with H1'23 seeing a substantial surge in overall property transactions. This played a role in driving up residential property prices in Dubai by 16.9% YoY as of June, as reported by REIDIN. Finally, the Central Bank of the UAE (CBUAE) mirrored the 25 bp increase in interest rates implemented by the US Federal Reserve in July, putting the key-policy rate at 5.4% and resulting in a total rise of 525 bp in just over a year. The short-term interest rate is now approaching its highest level since before the global financial crisis.