An Update on the Falcon Economy

[Music] good morning your excellencies distinguished guests ladies and gentlemen thank you to Abu Dhabi Finance week for inviting me to speak today I've been looking at the GCC for over 30 years and this really is an extraordinary time for Abu dhab and I'm very delighted to to highlight some some points so Abu dhabi's economy is booming it's benefiting from earlier Investments that are supporting growth and supporting the diversification of the economy on top of that we've had broad-based structural reforms and business-friendly policies strong decision making as well we remain highly positive on the medium and longer term growth outlook for Abu Dhabi the focus remains very much on developing new tech sectors high tech uh knowledge-based sectors that'll continue to broaden and deepen the economy we're seeing that in Investments we're seeing that in policies we're seeing that in Investments bringing in capital transfers and Technology back into the country the the B balance sheet of the government is very strong debt levels are low and that makes Abu Dhabi in a very strong position to manage Global uncertainties and maneuver any external risks we continue to see Abu Dhabi and the UAE continuing to outperform globally both developed economies and emerging economies I have some slides that that I'd like to highlight the first first I'd like to highlight is that since the pandemic Abu Dhabi has seen average growth over the last three years of O close to 9% that's extraordinary it's not just catching up from the pandemic but it's also very strong growth on the on top of that so if we compare if you look at the second chart on on the presentation if we look at where the economy was the non oil economy in 2023 it was 133% higher than the prepandemic level and the pace of growth has accelerated the key sectors that continue to Diversified the economy include areas such as construction manufacturing and of course financial services this reflects the role that the Abu Dhabi Global markets has made for deepening and strengthening financial markets and again if we looked at the breakdown of the growth in these areas um construction is 13% higher we've got manufacturing about 14% higher than the prepandemic level and financial services close to 133% higher um we continue see to see ongoing Investments and area you know growth this year first half of the year is close to seven uh 6% year onye one of the key areas that has been driving that is is transportation we've had the opening of the airport the new terminal last year we're seeing passenger numbers increase and that's also boosting other sectors as well visitor numbers to Abu Dhabi are up in the double digits and we can see in the second chart that's occupancy levels occupancy levels in the first 10 months of the year were up close to 10% they average 77% that's higher than the rest of the GCC and the UAE as a whole you can also see the occupancy is increasing over the summer period as Abu Dhabi becomes more of a global yearround destination you can see this in the the facilities and the museum GS in the in the theme parks that I Ure and this is only going to expand it's becoming a year around destination you are also seeing businesses and companies moving here the favorable business environment the favorable business uh regulations as well when we speak to our clients one thing we keep hearing is the support of the government entities to establish the international law the ease of doing business um Sarah mentioned it before the number of operating companies in the first nine months of the year are up 30 around 33% so that is significant what what does this also mean we've seen the data you see in the second chart is Abu Dhabi commercials Bank our own proprietary data and this shows spending by our credit cards and debit cards but also Merchant acquiring and this is increasing by double digits it has done since the pandemic and this reflects not only strong domestic spending as the population grows as its more skilled and high earning population but also as the tourism sector goes so we can see that consumption is growing very very strongly and there's a focus on developing new sectors of the economy I mentioned earlier the the investment vehicles of Abu Dhabi government you're seeing um them going out focusing on key sectors Financial Services artificial intelligence Transportation clean and renewable energy these are to list a few Life Sciences They're bringing back uh technology They're bringing back companies and again population growth and further diversification of the economy I have few slides um on on how quickly things have been changing the second chart that you see up on the presentation is is a indication of energy transition while we are focusing on economic diversification Abu Dhabi in our view will continue to play a central role as a source of energy globally but this this shows um the move towards clean and renewable energy uh you see that in 2018 less than 1% of domestic power generation came from RE renewable and clean sources that Rose to 2.5% in 2019 last year it's risen to about 40% that shows in a matter of years how quickly that has changed we continue to see investment last year Abu Dhabi awarded projects of close to 50 billion US Dollars already in the first N9 months it's close to 20 25 billion this will continue to support future growth the diversification of the energy source here is not only relevant for our net carbon um targets but also for reducing the carbon footprint of manufacturing exports whether it's Metals whether it's Downstream and and this remains very critical at a time of energy transition another area that we've seen strong investment regulatory development and infrastructure development is on AI these charts are by um you know Oxford University and other Global think tanks the lower the score the better it shows vibrancy development so it's not only UA Abu Dhabi leading on a GCC basis it's also a key player globally we're already seeing improvements in areas such as productivity reduce carbon emissions of of adnoc I'm I'm running out of time so just one more slide at a time of global fragmentation you're seeing more and more integration by Abu Dhabi and the UAE one of the areas that make us particularly positive are the sea agreements that are being uh organized with various companies so you're seeing deeper integration at a time when the world is moving in the opposite direction FDI Rose over 30% to to UAE last year it was over 6% of GDP that with the strong balance sheets the reforms we think Abu Dhabi is in a strong position glob and we expect the growth to continue thank you very much and it's been a pleasure to speak to you this morning thank you [Music]