As one of the biggest economy in the Gulf region, The United Arab Emirates is forecast to achieve an average real growth rate of 3.8% between 2019-2023, according to Dubai Chamber of Commerce and Industry. Non-oil sectors are driving the country’s economic growth with the total of real GDP projected to grow at the average of 4.1%. What are the growing sectors that will possibly shape the country’s economy trend in 2019.
Real estate sector has been one of the key economic drivers for the UAE and will continue to be one this year. The upcoming growth is also projected based on several stimuli and regulations from the government throughout 2018. The package from the Abu Dhabi government worth AED 50 billion, the law of 100% foreign ownership, a relaxation on property lending regulations for banks, are among the incentives intended to encourage investment in the UAE.
Other factors that boost the UAE real estate market are the new 10-year residency visa in the UAE and the five-year retirement visa. These laws could give eligible residents incentives to stay permanently and view UAE as a long-term option.
According to Jones Lang LaSalle (JLL), there were around 22,000 units delivered during 2018, brought the total residential stock to 520,000 units at the end of 2018, which is the highest for the last five years. JLL also estimates more than 60,000 units to be delivered in 2019.Tech Industry
The UAE is seen to be the most attractive Information Technology market in the Middle East and Africa region. The growth of IT industry is also supported by the rising oil prices and ongoing economic diversification initiatives. The UAE’s domestic IT market is expected to grow at an average of 5% annually in the period between 2017-2022, valued at nearly USD 8 billion.
The UAE is keen to develop and bring technology sector to the Middle East. The country has launched various programmes, including IoT, blockchain technology, and smart cities. As the IT industry is moving rapidly in the UAE in the region, companies will be looking at optimizing their businesses and technology is expected to play a big role. This transformation has created new opportunities and boosted the UAE’s competitiveness across all sectors.
As the largest and most populous city with 2.5 million people in the UAE, Dubai has one of the highest levels of ICT adoption in the region. Dubai has attracted USD 21.66 billion worth of foreign direct investment (FDI) in high-end technology transfers, such as AI and robotics, for the past three years. Dubai’s Department of Economic Development (DED) recorded around 860 projects have created more than 54,000 jobs in the technology sector during January 2015 to March 2018 period.
Retail sales across Gulf countries are projected to increase more than USD 24 billion in total by 2023, with the UAE to lead this trend. The industry is estimated growth rate of 16%, according to Euromonitor International. The data recorded that the retail industry in the UAE is currently worth USD 55 billion and is forecast to reach USD 63.8 billion.
Store-based is dominating with USD 52.7 billion of the overall market in the UAE. While non-store retailing, including online shopping, direct selling, mobile internet, social media and home shopping, is estimated to grow by 78% from 2018-2023. The initiatives taken by the government to streamline the retail infrastructure and strengthen the investment and tourism landscape act as a strong contributor to the growth of the sector.