A senior government official announced today, Wednesday, that the UAE capital, Abu Dhabi, plans to double the contribution of its industrial sector to the gross domestic product (GDP) amid increasing competition in the region to diversify the economy away from oil. Last year, the contribution of the industrial sector to the emirate's total GDP grew by 9.7 percent year-on-year to 90.8 billion dirhams ($24.72 billion), according to government statistics reviewed by Reuters today, which accounts for 16.4 percent of the total non-oil GDP and a little over eight percent of the overall GDP.
Abu Dhabi, which is home to about half of the UAE's industrial sector, aims to increase this figure to 172 billion dirhams by 2031. Rashid Al-Balooshi, Undersecretary of the Department of Economic Development in Abu Dhabi, told Reuters, "Oil is important to us in Abu Dhabi, but investment in non-oil sectors will have a greater impact on GDP... and we will continue to grow."
Since 2021, the UAE has also established a strategy to negotiate bilateral trade agreements with the main goal of enhancing non-oil exports to global markets. Al-Balooshi mentioned that in the first quarter, 27 new manufacturing operations began in Abu Dhabi, exceeding the target of 18 operations, adding that the government aims for another 90 operations in 2023 and 100 more by 2024.
Abu Dhabi holds the majority of the oil wealth of the United Arab Emirates, but Dubai, the neighboring emirate known for its glitz, is regarded as the commercial, financial, and tourism center of the region. The two sometimes compete with each other, while economic competition intensifies between the UAE and Saudi Arabia.
The non-oil GDP of Abu Dhabi grew by 6.1 percent in the first quarter, according to data from the Statistics Center, exceeding the overall GDP growth of 3.9 percent amid declining oil prices. The average growth in the six Gulf Cooperation Council (GCC) countries is expected to slow significantly to 1.5 percent in 2023 with falling oil prices, according to a Reuters poll published today, but the UAE's economy is expected to outperform with a growth of 2.8 percent.
