The UAE Central Bank has revised its forecast for the country's economic growth this year to 4%, up from the previous estimate of 3.9% in June, due to growth in the non-oil sector as the Emirates continues to pursue its diversification strategy.

The regulator also said that global economic agreements will further bolster this growth in its quarterly economic review released on Wednesday.

The Arab world's second-largest economy reported a record non-oil foreign trade volume of Dh1.4 trillion in the first half of this year, as per official data.

This surge follows the UAE's establishment of comprehensive economic partnership agreements (CEPAs) with fast-growing economies across Asia, the Middle East, and Africa, including countries like India, Turkey, Israel, Indonesia, Cambodia, Georgia, South Korea, Chile, and Mauritius, The National reports.

CEPA agreements are designed to lower tariffs and eliminate obstacles that hinder trade. This initiative is expected to boost national exports by 33% and contribute over Dh153 billion to the economy by 2031.

The UAE has been concentrating on diversifying its economy away from oil, with notable growth in the non-oil sector over recent quarters.

According to the Ministry of Economy, the country's economy grew by 3.4% in the first quarter, reaching a real GDP of Dh430 billion. During this period, the non-oil sector saw a year-on-year expansion of 4%.

In the first half of the year, the transport and tourism sectors experienced significant growth, with tourist arrivals increasing by 14.2%, according to the Central Bank report. Passenger traffic at Abu Dhabi and Dubai international airports rose by 33.8% and 8% respectively, during this time.

In addition, the real estate sector showed strong activity, with residential sales transactions in Dubai rising by 34.8% in the first half of 2024. In Abu Dhabi, sales transactions grew by 2.3% year-on-year during the January to June period.

The increase to the GDP this year also shows the “improved performance of the oil sector,” but growth forecasts continue to be “driven by tourism, transportation, financial and insurance services, construction and real estate, and communications sectors,” the regulator stated.