The UAE IPO Market: Unlocking New Horizons for Growth and Investments
The UAE has been making significant strides in diversifying its economy beyond oil dependence, driven by commitment to sustainable growth. Through strategic initiatives like "Vision 2021" and the "We the UAE Vision 2031", the nation is focusing on bolstering key sectors such as tourism, technology, and renewable energy. By channeling investments into innovation and infrastructure, the UAE is establishing itself as a global hub for trade and investment. This diversification strategy is also reflected in the country's robust IPO movement, as businesses seek to capitalize on the UAE's evolving economic landscape, offering new opportunities for investors and contributing to a more resilient and dynamic economy.
- The UAE's Strategic Shift Toward Economic Diversification Beyond Oil and Gas
Although the hydrocarbon sector experienced significant fluctuations, the non-hydrocarbon sector demonstrates a more stable and resilient performance despite global economic uncertainties affecting the UAE.
1.1 Real GDP Outlook
The UAE's 2023 GDP reflects positive growth trends across multiple indicators, particularly in key sectors vital to the national economy, as reported by the Federal Competitiveness and Statistics Centre. In 2023, the GDP reached AED 1.68 trillion at constant prices, representing a 3.6 percent increase from 2022. Abdullah bin Touq Al Marri, the Minister of Economy, emphasized that these figures solidify the UAE's position as the 5th largest economy in the world based on the real GDP growth index. Additionally, the UAE ranks among the top 10 global economies in various competitiveness indicators related to GDP.
At current prices, the UAE's GDP has reached AED1.88 trillion in 2023, growing by 2.3%. The country has strengthened its position among the top 10 globally in various GDP-related competitiveness indicators, ranking fifth in the Real Economic Growth Rate Index and sixth in GDP (PPP) per capita according to the IMD World Competitiveness Yearbook 2023. Additionally, it holds sixth place globally in the GNI Index in the UNDP Human Development Index Report 2024.
1.2 Non-Hydrocarbon GDP
The non-hydrocarbon GDP stood at AED1.25 trillion, showing a growth of 6.2 percent compared to the previous year. By the end of 2023, the non-hydrocarbon sector contributed approximately 75% to the GDP, marking a record-breaking growth of 2.5 percent from 2022.
Notable growth in the non-hydrocarbon sectors included:
- 14.3% Financial activities and insurance
- 11.5% Transport and storage activities
- 8.9% Construction and building activities
- 5.9% Real estate activities
- 5.5% Residency and food services
The non-hydrocarbon GDP at current prices amounted to AED1.43 trillion, achieving a growth rate of 9.9 percent, equating to an increase of AED 128 billion compared to 2022.
Looking ahead, non-hydrocarbon GDP growth is expected to stay strong at 5.4% in 2024 and 5.3% in 2025, primarily supported by base effects and stabilizing migration inflows, reflecting previous trends and an influx of new residents to the area.
1.3 UAE's Resilient Non-Oil Trade
The Total Non-Oil Foreign Trade in 2023 was 2,426 AED Billion with percentage change 11.9% from 2022.
The Non-Oil Exports in 2023 was 423.6 AED Billion with percentage change 15% from 2022.
1.4 Hydrocarbon GDP
In 2022, the hydrocarbon sector experienced significant growth driven by a rebound in global
demand as economies recovered from the pandemic. This resurgence led to increased oil prices and production levels, making it a particularly strong year for the industry.
Since 2023, the hydrocarbon sector has faced some challenges that have resulted in a decline. Oil production has averaged 2.9 million barrels per day in the first four months of 2024, reflecting a 4% decrease compared to the same period last year.
Despite these challenges, projections for 2025 are optimistic, with anticipated growth of 8.4%
following a modest increase of 0.3% in 2024. This positive outlook can be attributed to expected stabilization in global demand, ongoing investments in technology and infrastructure in the hydrocarbon sector, and heightened efforts to balance production levels by OPEC+.