UAE Barclays Bank CEO Rasha Badawi says that the past few years has seen the region experience rapid growth and consumer confidence across multiple sectors.
Byline Asim Al Khouli & George Ibrahim
Sharing her observations on the strength of the UAE’s economy, Barclays Bank CEO Rasha Badawi says that despite the slowdown in global economic growth – with the World Bank forecasting growth of 2.4 per cent in 2024 – the UAE is on track to achieve a unique growth trajectory this year.
According to Badawi, the World Bank recently raised its forecast for GDP growth for the UAE in 2024 and 2025 to 3.7% and 3.8%, respectively, noting the growing contribution of the non-oil economy to the economies of the Arab Gulf countries in general.
“There are many opportunities available in the construction sector, renewable energy, especially solar energy, water, food and agriculture, shipping and others. We have seen an increase in the volume of financing allocated to sustainable investments by high financial solvencies, family offices and institutional funds at the global level, and as more opportunities emerge at the regional level, these allocations can target sustainable financing locally and regionally,” says Badawi.
According to Badawi, the continued rise of future indicators, such as the S&P Purchasing Managers’ Index, reached 57.4 last December (index levels of more than fifty indicate growth).
Economic diversification initiatives continue to achieve fruitful results. According to the statement by the Minister of Economy HE Abdullah bin Touq Al Marri, the tourism and entertainment sector is one of the main pillars of economic diversification.
“We have already seen in the results of the revenues of hotel establishments in the UAE, for example, which recorded a significant increase to reach AED 32.2 billion between January and September 2023, representing a growth of 27% compared to the same period of Year 2022,” says HE Al Marri.
In the retail sector, Badawi says that the high demand for luxury brands attract high net worth individuals who wish to distribute their wealth into diversified investments, pointing out that Dubai is one of the most desired locations that attract this demographic – as a gateway for hosting high-level sports, fashion and design events in the region.
As for increased immigration, Badawi says that there is a growing trend of entire families moving to the area thanks to the security and safety it enjoys, and the high-quality educational and recreational services it provides.
“A number of our customers say that the attractiveness of the UAE rests in family-life, and there are plenty of outdoor activities and entertainment options suitable for children and adults alike,” says Badawi.
Commenting on the domestic market and its ability to sustain global movements, Badawi says that the strength of the UAE economy is buoyed against instability in other markets, and that the Arab Gulf countries in general remained far from issues affecting global markets.
Other variables such as the strong recovery of international travel rates after the global health crisis have been a positive development for the country as domestic airlines have stepped up their recruitment campaigns and opened new air routes, as well as maintaining the country’s presence as a leading major hub for cargo and travel. The tourism sector has made a full recovery post-COVID and has reached higher levels than those recorded prior to the pandemic.
The banking sector is optimistic too says Badawi.
“We believe that the diversification of local economies, the increase in the volume of foreign investments, especially in the UAE, and the presence of the region as one of the most important financial and banking centres qualify it to move forward in an optimal manner,” says Badawi.
The UAE has maintained a flexible trade system, with increased levels of adjustment in visas and lower taxes. It expected that the domestic banking sector will continue to grow in light of continued economic growth and the size of GDP.
On the growing popularity for sustainable and environmentally friendly financing, Badawi says that the past few years have witnessed a remarkable growth in sustainable finance management.
