UAE Economic Outlook
Although GDP data for the UAE is unavailable past Q2 2022, the economy is expected to have performed well through Q1 2023, despite gradually waning growth rates. The oil sector of the economy should have been the main drag on growth. Year-on-year crude output expanded a mere 3.0% in Q1 2023, down from the prior quarter’s 8.4% growth and markedly below Q3 2022’s 14.7% expansion. Meanwhile, the UAE announced a 144,000 million barrel per day output cut, effective 1 May, which will be slowing the oil sector’s performance further into Q2. The non-oil sector of the economy, meanwhile, should have driven growth: The private-sector PMI revealed business conditions improved, on average, at a stronger pace in H2 2022 than in the prior six months. The PMI then averaged lower in Q1 2023. In politics, the UAE began mending severed ties with Qatar in April.
Inflation in Dubai receded to a one-year low of 4.3% in March (February: 4.9%) as prices for transport fell and food inflation dimmed. Country-wide data is unavailable past Q2 2022, but in line with price developments in Dubai, inflation should have peaked in mid-2022 and should trend downwards through end-2023.