28 March 2023
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UAE GDP growth expected to reach 3.9% in 2023

By Daniel Richards

The UAE central bank expects GDP growth to reach 3.9% in 2023, down from an estimated 7.6% in 2022. We have recently revised up our estimate for last year’s GDP growth to 8.0% and also expect growth to slow to 3.9% this year.  The central bank’s quarterly report also provided official whole UAE inflation statistics for 2022, showing inflation averaged 4.8% last year, broadly in line with Dubai’s 4.7% average inflation.

The UAE and Israel have signed a customs deal that will allow the free trade agreement negotiated last year to come into effect. Tariffs on 96% of goods traded between the countries have been removed. Last year bilateral trade reached more than USD 2.5bn.  

Germany’s IFO business climate index rose to 93.3 in March from 91.1 in February, slightly higher than the market had expected and the highest reading in over a year. The improvement in sentiment was evident both in the current assessment and the expectations indices, despite the recent turbulence in Europe’s banking sector. While many still expect a mild recession in the Eurozone this year, recent survey data point to relative resilience in the economy.

Today’s Economic Data and Events

  • 18:00 US Conference Board Consumer Confidence (Mar) forecast 101.0

Fixed Income

  • News of the purchase of Silicon Valley Bank by First Citizens Bancshares Inc tempered fears related to the recent banking sector turmoil and sent bond yields higher across several markets.
  • The US 2yr yield rose to 3.995% on Monday after having ended the previous week at 3.767%, while the US 10yr yield rose by 15bps to end the day at 3.53%.
  • UK and German bond yields also rose on Monday, with 10yr gilt yields rising by just under 9bps to 3.359% and 10yr bund yields rising by 10bps to 2.22% 


  • The dollar closed down 0.3% against its basket of peers on Monday, ending the day at 102.63, snapping two days of gains on Thursday and Friday. Some of the haven play from the end of last week eased off as banking sector concerns abated, and the Japanese Yen lost 0.6% against the dollar to close at 131.57, though it is recouping that loss in trading this morning.
  • The other majors also gained against the greenback yesterday as Sterling added 0.4% to 1.2287 and is now at its highest levels since the start of February, while the Euro gained 0.4% to 1.0815.
  • Looking at the commodity currencies, the AUD gained 0.1% to 0.6681 yesterday while the NZD lost 0.1%.


  • The Hang Seng dropped 1.8% on the first day of the trading week as trade data out of Hong Kong for February remained weak. There were more muted losses on the mainland as the Shanghai Composite dropped a more modest 0.4%, while in Japan the Nikkei and the Topix both closed 0.3% higher.
  • The week started positively in Europe as concerns around banking sector stability abated. The FTSE 100 and the CAC added 0.9% and the DAX gained 1.1%.
  • In the US, the NASDAQ fell 0.5%, but the S&P 500 (0.2%) and the Dow Jones (0.6%) both gained.
  • Locally, the DFM dropped 0.7% while the ADX lost 0.8%. In Saudi Arabia, the Tadawul ended the day flat.


  • Oil prices rose sharply on Monday on the back of an easing of banking sector concerns, together with a supply disruption from the Turkish Port of Ceyhan due to a failure to resolve a legal dispute between Iraq, Turkey, and the semi-autonomous region of Kurdistan.
  • Brent closed the day 4.17% higher to reach USD 78.12/b, while WTI rose 5.13% to USD 72.81/b.  

Written By

Daniel Richards Senior Economist

Jeanne Walters Senior Economist

Khatija Haque Head of Research & Chief Economist

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Daniel Richards

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