An Update on the Falcon Economy

Good morning, your excellencies, ladies and gentlemen. It's my great pleasure to be here and provide an overview of Abu Dhabi's economy. If I had to pick three words to describe Abu Dhabi's economy, I would choose booming, dynamic, and resilient. Now, this is quite a combination at any time, but especially at a time when the global economy is facing fragmentation, policy uncertainties, and high government debt levels. As such, we remain positive on Abu Dhabi's economy, not only on a a regional basis, but also on a global basis, reflecting the exceptionally strong growth that we've seen from 2021.

You can see on the first chart on the left that the non-oil economy in real terms was 19.5% higher in 2024 than it was in 2019 pre- pandemic. Our estimate is that by 2026 the nono economy will be over 30% higher than the than the 2019 level. You can see on the second chart that we believe our forecast of 6% real non-oil GDP growth will pull up UAE's non-oil GDP growth and by far outpace global and regional growth. Now we also see the hydrocarbon sector providing a strong grow uh boost to headline growth.

Again, in real terms, this reflects both higher oil output, but also gas output as earlier investments um come in into force. The oil the non-oil economy, you can see that there's been multiple drivers and engines of non-oil growth. And despite doubledigit growth in some of the key sectors, the non-oil economy expanded by 6.4% yearonear in the first half of the year. Areas such as construction and finance grew by grew by around 10% in real terms.

construction sorry um and real estate by by over 8%. Now we see a number of drivers boosting this growth. Strong investment program, population influx, a positive regulatory and uh environment and policy backdrop population in Abu Dhabi over the last two years expanded by over 7%. It surpassed the eight four billion million level and um is up over 30% since 2018. But what is also critical to us, it's not just the headline number.

It's more head high netw worth individuals and professionals moving to Abu Dhabi. This reflects not only a wealth transfer but also a knowledge transfer and also supporting the consumption environment. The consumption backdrop is more visitors coming to the to Abu Dhabi. You can see on the first chart this is occupancy levels averaging around 80% for the first nine months of the year. that even at the height of the summer, you didn't see occupancy levels fall below the 70 level.

This reflects Abu Dhabi becoming an all yearround destination for tourism. We believe that further indoor facilities including the the Disney theme park, various museum projects as well as the outdoor facilities will strengthen this further. Furthermore, we can see the development of the aviation sector also supportive for for tourism and consumer spending. Despite this being the second year of the airport being open, um we're still seeing doubledigit growth in passenger numbers. This is a perfect example of earlier investments paying off.

And now to segue from the from the booming to the dynamic, of course the investment program is central to both of them. We see the UAE at the beginning of its largest investment cycle. There's been around 260 billion of projects awarded from 2023. Of that around 43% has been in Abu Dhabi. various sectors behind that.

Of course, real estate includes construction includes real estate both commercial and residential but the gas and power is very important as well. Gas not only to meet domestic demand, external demand for a transition fuel but also for industrial development. This includes chemicals, refining, but also lowcarbon manufacturing and also AI and other industrial sectors. The largest award in the first nine months of the year in the GCC was a power project, a solar project with battery storage which will be used for AI. Here you can see the different verticals that Abu Dhabi is looking to develop.

Indeed, this includes areas such as tech, resources, finance, healthcare and industry. We see various um aspects being utilized to support this development from infrastructure, regulatory fe um regulatory environment but also the strategic partnerships. A key announcement this year was for the Stargate UAE. This is in conjunction with the global largest global tech companies. It will provide AI infrastructure and compute capacity for a radius of 2,000 miles covering areas like Europe, Africa and Asia.

Um this highlights also the developments in the various ecosystems. The growth in the number of of companies and AUM at the ADGM. UAE on the first chart already has one of the best AI infrastructures globally. And on the second chart, renewable and clean energy already accounts for over 40% of Abu Dhabi's energy transition. But also what make us makes us very positive about the UAE's and Abu Dhabi's future is the various trade and sea agreements that the UAE is a agreeing.

There's 14 SEPA agreements in place and more to be announced to us. This is not only supporting sectors such as transportation, logistics and exportled, but it also reflects the growing role of the UAE as a trans shshipment hub, the nerve center of global trade and the repositioning of supply chains. It also is boosting FDI into the UAE. There was over a 40% increase of FDI inflows accounting for over 8% of GDP, one of the strongest globally. And alongside the infrastructure, the connectivity, the the SEAg agreements which are making trade um frictionless and cheaper, we think labor mobility is also central.

Now finally to the resilience. This is underpinned by low government debt levels and high net foreign assets including at the sovereign wealth fund level. We continue to see Abu Dhabi uh realizing fiscal surpluses and government debt is below 20% of GDP. We feel the government debt issuance on the bond market is more linked to a yield curve rather than for deficit financing. And thank you very much.

Finally, to conclude, we continue to see strong and resilient growth driven by an investment program that's increasing capacity and policy that's supporting companies and individuals to move here. We continue to see policy focused on economic growth and expansion in the energy energy side and broader side broader aspects of the economy. And finally, the strength of the government balance sheet means that Abu Dhabi can continue with its medium-term development plans even at times of global uncertainties. Thank you very much.