Major growth is forecast in the UAE’s non-oil sector in 2023, fuelled by the government’s policy push in key sectors, a forecast 20% rise in tourism sector growth and the ongoing bull run in the real estate market.

This will result in a spike in job creation and employment, according to Scott Livermore, chief economist and managing director at Oxford Economics Middle East.

“The non-oil economy has been recovering strongly from Covid, and we expect to see continued growth across the non-oil sector [in 2023],” Livermore told Arabian Business.

As well as a 20% rise in travel and tourism industry growth, the robust growth momentum in the property sector, especially in Dubai, will continue next year, the economist added.

“However, we would describe growth over the next few years as being broad-based – and that includes the oil sector – as the UAE seeks to increase production levels. The UAE is pushing for growth across the economy, not just in the non-oil sector,” Livermore stated.

The UAE’s overall economic growth is forecast to decelerate to 2.7% next year, yet the non-oil sector remains resilient against soaring inflation and interest rates, according to the Economic Insight report for the Middle East, published by ICAEW (Institute of Chartered Accountants in England and Wales).

Furthermore, the International Monetary Fund has forecast overall GDP growth for the UAE to surpass 6% in 2022, a rise from 3.8% in 2021.

“Having expanded by around 15% in 2022, we expect oil production in 2023 as a whole to be only slightly up on the average of 2022,” Livermore added.

“There are also headwinds from inflation, tighter monetary policy, and recessions in the U.S. and parts of Europe that will weigh on the non-oil economy, but it should be fairly robust to these,” he said.

However, the economist said there may be upside risks to the global economic outlook.

“For example, the supply chain issues could normalise faster than expected aided by an early and successful pivot by the Chinese authorities away from their zero Covid policy,” he stated.

“These factors drive down inflation and allow an early unwind of monetary policy tightening.”