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February 22, 2024

Abu Dhabi’s non-oil economy grew 12.3% in Q2 2023

Abu Dhabi’s non-oil economy grew by a record 12.3 per cent in the second quarter of 2023, according to the Statistics Centre – Abu Dhabi (SCAD), as the city’s efforts to become a hub for hedge funds and other financial firms start to pay off.

The preliminary datafrom SCAD shows that the emirate’s gross domestic product (GDP) reached Dhs154bn, the highest since 2014 to break a record registered in Q1 2023 when it surpassed Dhs146bn. Abu Dhabi’s overall economic growth jumped 3.5 per cent compared to the same period last year, demonstrating the competitiveness and resilience of the city as it navigates global economic headwinds.

The value of the city’s real GDP soared to a record Dhs287bn during the period under review, driven by the growth in non-oil activities. The non-oil economy continues to increase its contribution to the emirate’s GDP to 53.7 per cent, boosting growth of non-oil GDP by 9.2 per cent in the first half of 2023.

 

Growth in the first six months of the year is attributed to the emirate’s economic strategies and policies that are designed to foster innovation and development including the Abu Dhabi Industrial Strategy. The initiative seeks to accelerate the transformation of Abu Dhabi’s manufacturing sector while strengthening the emirate’s position as the region’s most competitive industrial hub.

“The continued strong performance of Abu Dhabi’s economy despite mounting challenges in the global economic landscape reaffirms the success of the emirate’s diversification strategy and adaptability to markets’ shifts,” said Ahmed Jasim Al Zaabi, chairman of the Abu Dhabi Department of Economic Development.

“Our comprehensive strategies, prudent policies, countercyclical measures, and business-friendly ecosystem further enhance Abu Dhabi’s position as a rising economic powerhouse and preferred destination for talents, businesses and investments.”

Abu Dhabi’s sector growth

Meanwhile, the SCAD said the value-added by the construction economic activity in Q2 2023 reached 19.1 per cent year-over-year (YoY) to reach Dhs25.3bn, the highest quarterly value-added since 2014, with the industry contributing nearly 9 per cent to the city’s GDP in Q2 2023.

The statistics authority said manufacturing activity grew 7 per cent to achieve Dhs25bn during the same period under review, contributing over 16 per cent to non-oil GDP. The sector contributed 8.7 per cent to Abu Dhabi’s total GDP.

Similarly, the wholesale and retail trade activities reached their highest quarterly value since 2014 at Dhs16.7bn, contributing 5.8 per cent to the total GDP in Q2 2023. Furthermore, the financial sector grew nearly 30 per cent YoY and the value-added by the industry surged to more than Dhs18bn in Q2 2023, driven by financial and banking policies that are aimed at boosting competitiveness, both locally and globally.

Last month, the Abu Dhabi Global Market (ADGM) said its assets under management (AuM) surged by a record 35 per cent in the first half of the year, as the financial centre continues to attract major global and regional players.

Several major firms have opened offices in the city’s financial hub including Goldman Sachs Group, Brevan Howard Asset Management, Ray Dalio’s family office and China’s Asian Infrastructure Investment Bank.