On Wednesday, a state news agency said the UAE central bank’s quarterly report revealed that total real GDP increased by 8.2% annually in the first quarter of 2022.
According to the statement, The central bank anticipates real GDP to grow 5.4% in 2022 and 4.2% in 2023 and expects non-oil GDP to increase by 4.3% and 3.9% in 2022 and 2023, respectively.
There is going to be a higher probability of stronger growth due to higher oil production and a government vow to double the manufacturing sector’s size by 2031.
Hydrocarbon GDP soared an estimated 13% in the first quarter when oil production averaged 2.95 million barrels per day.
The central bank said that Shocks in global oil supply and demand have added to oil price volatility and strengthened the level of the price. Based on the developments in global economic activity, recessionary increased oil supply to balance the markets and stimulate global growth.
It added that upward inflation pressures would result from higher wages and higher rents. In a conclusion, domestic demand shall increase and might lay more pressure on prices, especially on the non-tradable like rents. The pass-through of higher oil prices to fuel will have a significant impact on the cost of transportation and therefore on headline inflation. This is also valid for food-related items that are soaring globally, with inevitable consequences for the UAE.
According to the central bank, UAE oil GDP is expected to thrive at 8% this year and 5% in 2023. Non-oil GDP was up 6.1% in the first quarter and was seen growing 4.3% in 2022 and 3.9% in 2023.
Inflation was projected at 5.6% for 2022. It reached 3.4% in the first food. Transportation inflation – with a 12.7% weight in the consumer basket – surged 22% in the first quarter.
Average residential property prices in Dubai jumped 11.3% in the first quarter. Off-plan sales surged 94.6% in the quarter, while secondary market sales were up 76.1%.