Significant market movements are predicted to change the UAE’s economy in 2024. The GCC economy’s resiliency, the country’s emphasis on sustainable finance, the changing character of banking, and the potential growth of the open banking market are some of these developments. The United Arab Emirates’ financial environment is expected to be significantly shaped by its innovative banking sector, economic diversification, and strong banking industry. With an emphasis on encouraging sustainable investments and reaching climate neutrality, the nation’s sustainable finance ecosystem is growing. The UAE’s robust economic expansion, bolstered by industries including real estate, manufacturing, tourism, and construction, is also a major influence on the country’s economic forecast for 2024.
1. Real – Estate Market
Prices always rise in businesses when there is a high demand for a product or service and a limited supply. The same is true with real estate. In 2023, real estate prices in the United Arab Emirates surged dramatically, and it appears that this trend will continue in 2024. For example, due to the high demand for real estate among residents, investors, and wealthy individuals, Dubai’s growth is predicted to be comparable to that of the previous year.
The UAE real estate industry is expected to continue expanding through 2024. The good state of the nation’s economy is reflected in the experts’ prediction that the GDP will expand by double to 4.8% in the upcoming year. In a booming economy, more people want to own homes to avoid paying higher rents.
In 2022, 40% of all home buyers were from other countries, and it’s predicted that this percentage will increase to 50% next year. This means more people will likely try to buy homes and make the UAE their permanent home in the coming year, attracted by the promising economic opportunities and the stability offered by the real estate market.
The UAE real estate industry, particularly in Dubai, had a fantastic year in 2023. Many positive developments occurred, including an increase in the number of foreign nationals owning property and a booming market for luxury real estate. Between January 1 and December 12, nearly 124,000 real estate deals in Dubai were completed, bringing in an incredible $102 billion in sales revenue.
Looking ahead, the projection for 2024 is consistent with the optimism observed in the year prior. Dubai is expected to rise at a rate similar to its remarkable 2023 performance. This expectation is fueled by the ongoing strong demand from three major stakeholders: locals looking for long-term residence, savvy investors seeking profitable opportunities, and high net worth individuals drawn to the allure of Dubai’s luxury real estate offerings.
In conclusion, it is anticipated that the real estate market in the United Arab Emirates would follow a similar successful trajectory to that of 2023–2024. The UAE is positioned as a prominent player in the global real estate landscape due to the allure of Dubai, which is driven by demand from around the world, economic growth, and a robust market for luxury properties. Looking ahead, the real estate market in the United Arab Emirates not only exhibits development potential but also presents a strong economic narrative, making it an appealing investment opportunity for prospective buyers.
2. The AI Sector
To many’s surprise, artificial intelligence (AI) has become the leading player in the United Arab Emirates (UAE) market. The technology market in the nation is greatly boosted by the extremely high level of innovations and investments in this area. The UAE has used AI solutions widely across a range of industries, including advanced education programs, transportation and logistics, demonstrating its active pursuit of AI leadership. The establishment of a national AI plan and the appointment of the first Artificial Intelligence Minister in history in 2017 are indicative of the government’s dedication to AI. The UAE is anticipated to become a major global supplier of AI technology, and its AI market is predicted to grow at an exponential rate. AI is expected to boost the UAE’s economy by a significant $135.2 billion by 2030.
AI regulation is a major concern for enterprises in the United Arab Emirates, with over 87% of corporate executives thinking that rules and guidelines for AI use need to be created.
Authorities may be worried, but AI is having a big impact on the essential skill sets for the modern business.
Future businesses will be largely shaped by innovation, as indicated by the 59% of business executives in the UAE who say they will boost their investment in sophisticated technology and the 82% who say they would do so to adapt to the changing market.
The GENZ AI Market
Bright insights regarding the use of generative AI technologies have surfaced from a survey of more than 5,000 higher education officials and students from around the world, including the United Arab Emirates (UAE), Saudi Arabia, the United States, Brazil, Singapore, and the United Kingdom. With 32% of students reporting weekly usage—more than three times the rate seen in the US and the UK—students in the UAE particularly stand out as heavy users of tools like ChatGPT. Furthermore, it is anticipated that the UAE’s passion for AI will grow, with an astounding 80% of respondents saying they plan to use it more frequently over the next six months.
The study also finds that students (36 percent) in UAE are very comfortable with using AI chatbots to get quick answers to their questions, compared with only 13 percent in the United Kingdom.
When asked what role they think AI will play in higher education, 56% of students in the UAE believe it will revolutionize teaching and learning methods. They also believe in AI’s collaborative potential, with 40 percent saying they believe AI will enhance students’ engagement and interactivity. In addition, 38% of UAE student respondents feel artificial intelligence can provide personalized learning experiences.
3. The GCC’s rise to importance in the global energy transition.
The nations that make up the Gulf Cooperation Council (GCC), which includes the United Arab Emirates (UAE), have become significant stakeholders in the global energy shift. Although the region’s severe weather and lack of infrastructure have historically created difficulties, the GCC countries have begun to take steps to switch to greener and more sustainable energy sources. For example, the United Arab Emirates has set a target of 44% renewable energy by 2050. With the potential to develop into a hub for clean fuels and renewable energy, the GCC region presents substantial investment opportunities in the energy transition.
The UAE’s efforts to shift to a more energy-efficient economy have been greatly influenced by the COP28 summit. The deal reached at COP28 is a major turning point in the battle against climate change since it is the first international document to specifically call for a decrease in the use of fossil fuels.
The UAE can now continue to work towards switching from fossil fuels to cleaner, more sustainable energy sources because of this development.
The United Arab Emirates (UAE) is an important player in the global energy transition since it has access to affordable renewable energy sources. Because of the high rates of solar radiation and the abundance of suitable and available land, the region has some of the highest potential for solar power in the world.
The UAE’s dedication to renewable energy was further demonstrated in 2023 when the world’s largest single-site solar facility, the Al Dhafra Solar facility, launched. Although solar
energy is the most common renewable energy source, other areas in the region—like Oman— benefit from strong wind resources. This ability, along with investments made in the production and export of green hydrogen and its derivatives, puts the area in a strong position to move away from its status as a major exporter of fossil fuels and instead become the leading exporter in renewable energy.
These are a few economic areas in the UAE markets that we should all be aware of. In addition, in future the blog will provide an extensive overview of each of these sectors, so be sure to pay attention to that as well.
The Summary
The UAE’s economy is expected to see substantial upheaval in 2024, driven by a few crucial industries. The strong demand from locals, investors, and international nationals is likely to sustain the real estate market’s rising trajectory, especially in Dubai. The nation’s strong economic growth, bolstered by industries including real estate, manufacturing, tourism, and construction, has a significant impact on its economic projection for 2024. The UAE’s emphasis on sustainable finance and the changing banking industry will also have an impact on the financial landscape of the nation. With large investments and innovations propelling its expansion, the AI industry is also becoming a major player in the United Arab Emirates.
In addition, the GCC nations—including the UAE—are advancing the global energy transition significantly, emphasizing sustainable practices and renewable energy. Both opportunities and difficulties for people, firms, and the whole economy are presented by these advancements. The UAE’s commitment to the global energy transition is further demonstrated by its enthusiasm for renewable energy and its potential to develop into a center for clean fuels and renewable energy. In general, development, innovation, and a move towards sustainability characterize the UAE’s economic landscape in 2024, making it a desirable place for firms and potential investors to invest.