UAE’s economic growth in October 2023 was propelled by the Emirate’s non-oil private sector which picked up pace through new orders, thereby climbing to the highest level in over four years.
The seasonally adjusted S&P Global UAE Purchasing Managers’ Index (PMI) surged to 57.7 in October 2023 from 56.7 in September to the highest level since June 2019, thus indicating a robust improvement in the non-oil sector’s activities.
“Sharply rising new order intakes supported a marked increase in activity, as well as further additions to purchasing and staffing levels,” the survey report remarked.
“Strong economic conditions in the non-oil sector extended into the final quarter of the year, as October PMI results signalled a new recent record for new business growth. Rising at the fastest rate since June 2019, new order volumes provided additional support to output which continued to rise markedly,” said David Owen, Senior Economist at S&P Global Market Intelligence, while interacting with Zawya.
However, rising fuel and material prices in October 2023 also took inflationary pressures to a 15-month high. The S&P survey also noted the businesses hiking their own selling prices for the first time in a year-and-a-half, while providing discounts to their customers at the same point in time.
“After dropping to a recent low of 1% in July, headline inflation could therefore pick back up in forthcoming readings,” said Owen, as he noted that the rise in the new orders index led to firms boosting their inventories at the start of the 2023 fourth quarter.
“Confidence in the 12-month outlook also remained elevated to the second-highest level since March 2020. Robust demand expectations were largely behind the positive outlook,” the report concluded.
Meanwhile, the UAE is also looking to invest as much as USD 50 billion in India, with provisional pledges to be announced in early 2024, as per a Bloomberg report.
“Deals being discussed include stakes in key Indian infrastructure projects and state-owned assets, with some of the investments possibly involving UAE sovereign wealth funds such as the Abu Dhabi Investment Authority, Mubadala Investment Co. and ADQ,” the report noted further.
India has become the UAE’s second largest trade partner with bilateral trade between the two countries hitting USD 84.5 billion in the year from April 2022 to March 2023. The two countries also recently signed the Comprehensive Economic Partnership Agreement (Cepa) to bolster the trade ties further.
The UAE became the fourth largest investor in India during 2022-23, with foreign direct investment from the Arab world’s second-largest economy to the South Asian country jumping to USD 3.35 billion.
As the UAE seeks economic diversification, both countries now aim to increase their non-oil bilateral trade to USD 100 billion.
Entities overseen by the Deputy Ruler of Abu Dhabi Sheikh Tahnoon bin Zayed Al Nahyan have held early-stage talks on investing in India.