UAE’s Real GDP to increase by 5.3% in 2024, According to S&P Global
S&P Global Ratings expects a significant increase in the UAE’s real GDP to 5.3% in 2024, up from 3.4% in 2023.
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This optimistic review is a result of the UAE banks’ exceptional performance in 2023, highlighted by the lower provisioning requirements and higher interest margins, in addition to improved liquidity levels as deposit growth outpaced new loan growth. The report also noted that the outlooks for the banks in the UAE are stable.
The agency attributes this economic momentum to the increase in oil production and the robust contribution of non-oil sectors, with growth expected from the hospitality, real estate, and financial services sectors.
S&P Global Ratings highlights the exceptional performance of some UAE banks, which achieved record profits in 2023. This success is attributed to robust credit growth amid an environment of rising interest rates. The positive economic climate has also led to lower provisioning requirements for new loan losses, further strengthening the banks’ financial results. This indicates a healthy banking sector that is well-positioned to support and benefit from the UAE’s economic growth.
Moreover, the agency predicts a positive track for bank profits, boosted by growth in non-interest income which reflects a surge in business and commercial activities.
S&P Global Ratings anticipates a cut in interest rates by the US Federal Reserve by 100 basis points in the latter half of the year and expects the Central Bank of the UAE to align with this adjustment due to the dirham’s peg to the US dollar. This scenario is seen to sustain banks’ net interest margins due to the higher interest rates, thereby supporting profitability.
The agency also foresees a steady strengthening in retail lending as banks keep penetrating this sector. And the UAE banks’ funding structures are deemed robust with high liquidity levels, as evidenced by the average cash and money market instruments of the top 10 banks reaching 21.8 percent at 2023’s close, and a solid core customer deposit base that grew by approximately 12 percent last year.
Additionally, Standard & Poor’s highlighted that UAE banks remain in a strong position in terms of net foreign assets, which increased to 27.9 % of system-wide domestic loans as of 30th November 2023, from 9.6 % at the end of 2021.
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With the growing global demand for digital infrastructure, Damac has been expanding its footprint in this important sector.
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Damac Group, a renowned conglomerate with a diverse investment portfolio of luxury real estate, hospitality, property management, and logistics, has announced its plan to invest up to $1 billion in the data centers sector over the next few years.
Recognizing the increasing global demand for digital infrastructure, Damac has been expanding its footprint in this crucial sector. A significant milestone in Damac’s diversification strategy was the launch of Edgnex Data Centers in 2021, which has enabled the group to capitalize on the growing need for robust digital infrastructure.
According to Damac, Edgnex is making significant strides in Saudi Arabia, with facilities under construction in Dammam and Riyadh that will deliver 55MW by 2025. Additionally, plans are underway for a data centre in Amman, Jordan, and another in Turkey in partnership with Vodafone.
In May, Damac had announced its entry into the Indonesian market with plans to build a data center in Jakarta. The 15MW facility, located along MT Haryono, is scheduled to complete its first construction phase in the fourth quarter of 2025.
“This substantial investment in the data center sector reflects our commitment to advancing digital infrastructure and supporting the technological transitions that are essential for future growth and innovation,” said Hussain Sajwani, the Founder and Chairman of Damac Group.
In addition to the technological transitions and diversification, particularly in the data centers sector, Damac Group is heavily focusing on its Artificial Intelligence (AI) investments.
The increased focus on AI and technological infrastructure, he stated, is expected to bolster the Group’s existing portfolio and pave the way for new strategic partnerships and collaborations.
By investing in AI and data centers, it aims to leverage advanced technologies to create value and drive sustainable growth, he added.
The Damac Group’s diversified family office has already invested in over 70 funds across various strategies, demonstrating its commitment to fostering innovation and growth across multiple industries.
With this new focus on AI, the Group aims to further enhance its role in advancing foundational AI models and infrastructure.
“As a forward-thinking organization, we recognize the transformative potential of AI in shaping the future,” remarked Sajwani.
“Our increased investment in AI reflects our commitment to supporting the development of groundbreaking technologies that can drive significant progress and create new opportunities across various sectors,” he stated.
According to him, Damac has made notable investments in leading AI companies including a $50 million in the AI startup, Anthropic – as one of the top investors who have bought into the company from the bankrupt cryptocurrency exchange, FTX.
Also it has made investments in xAI – an American AI startup founded by Elon Musk and in Mistral – a France-based AI company which is one of the best European large-language model open source.
“We are excited to be part of the AI revolution and to contribute to the growth of this dynamic industry,” said Sajwani.
“Our investments in companies like Mistral, Anthropic, and xAI underscore our dedication to fostering innovation and driving the next wave of technological advancements,” he added.
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
Americans now think they need at least $1.25 million for retirement, a 20% increase from a year ago, according to a survey by Northwestern Mutual
