Economic Overview

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

The United Arab Emirates registered subdued economic performance in recent years, partly due to cuts in oil output as part of OPEC agreements, continued corporate restructuring, reduced government investment and declining real estate prices. External factors also include a slowing global economy, geopolitical tensions, weaker energy demand and the COVID-19 pandemic. Nevertheless, the country returned to robust growth in 2022 (5.1% of GDP according to the IMF), led by a strong rebound in tourism, construction, and activity related to the Dubai World Expo, as well as higher oil production, with elevated oil prices supporting high surpluses in the fiscal and external balances. Domestic activity should support the economy in 2023, with growth forecast at 4.2% by the IMF. Non-hydrocarbon growth, in particular, should be around 4% and is expected to accelerate over the medium term with the implementation of ongoing reforms. For 2024, the IMF forecasts GDP growth at 3.9%.

The UAE’s public finances are sound. In 2022, higher oil prices contributed to an increase in government revenues (almost half of the total fiscal revenues derive from the hydrocarbon sector) and to an improved budget surplus estimated at 9.4% of GDP by Fitch Ratings. In light of the likely drop in oil prices, Fitch expects the surplus to narrow accordingly, to 4.4% in 2023 and 0.9% in 2024. The consolidated UAE government debt-to-GDP ratio decreased to 30.7% of GDP in 2022 (from 34.7% one year earlier) and should follow a downward trend over the forecast horizon (29%). Nevertheless, the seven Emirates have varied debt profiles, with the Emirate of Dubai recording the highest level, at 81% of its GDP in 2022 (Fitch). Furthermore, the UAE’s Central Bank and sovereign wealth funds own important foreign assets, providing the country with a large liquidity cushion (Abu Dhabi holds the world's fourth-largest sovereign wealth fund) and making the country a net creditor at the global level. Overall, the Federation is estimated to have around USD 700 billion of assets in its sovereign wealth funds (Coface). In line with global trends, inflation has risen to an average of 5.2% in 2022. The IMF expects inflationary pressures to moderate gradually to 3.6% this year and 2% in 2024. In the context of the ambitious ‘Project of the 50’ agenda, the government took a series of measures to improve competitiveness, attract investments, modernise and diversify its economy. The government also introduced a corporate income tax regime in 2022.

The UAE has one of the highest per capita income levels in the world (estimated at USD 77,272 in 2022 at PPP by the IMF) and a highly developed welfare system. It also has one of the lowest rates of unemployment in the Middle East, at 3.4% in 2022 according to the World Bank (while Dubai enjoys the lowest unemployment level in the world, at around 0.5%) and depends heavily on foreign labour (more than 85% of the workforce). A policy of 'Emiratisation' has been launched to encourage the employment of the local workforce; nevertheless, the unemployment rate among nationals continues to be considerably high compared to the rate among non-nationals (it varies according to the emirate and is the highest in Abu Dhabi).

Foreign Trade

The United Arab Emirates is among the world’s most dynamic markets in terms of foreign trade, with trade accounting for 167% of the GDP according to the latest available data from World Bank. The country is one of the world's top 20 largest exporters and importers of commodities and the largest trading nation in the Middle East. Oil products are by far the largest item of exports (the country is the world’s 5th oil exporter), followed by gold, telephone sets, diamonds, and jewellery. Gold is also among the major imports, along with telephones, diamonds, motor cars, and jewellery (data Comtrade).

Saudi Arabia is the top destination of Emirati exports (6.2%), followed by India (5.6%), Iraq (3.4%), Hong Kong (2.5%), Oman (2.4%), and Kuwait (2.2%). China (14.9%), India (6%), the United States (4.9%), Japan (3.1%) and Turkey (2.8%) are among the United Arab Emirates' main suppliers of goods and services. The recent UAE-Israel normalization deal, which comprises trade and technology cooperation and allows UAE oil to be sent directly to Europe via an Israeli pipeline, should positively impact trade in the upcoming future. In 2022, the country also signed Comprehensive Economic Partnership Agreements with Indonesia and India, with more agreements under discussion with partners like Turkey, Colombia, Ukraine, Cambodia, etc.

The United Arab Emirates has a structurally positive trade balance, but the surplus is closely linked to global oil prices. In 2021, the country recorded a trade surplus accounting for 25.3% of its GDP (World Bank). According to WTO data, in the same year, the UAE exported USD 425.1 billion worth of goods (+33.1% y-o-y) and USD 101.8 billion (+66.2% y-o-y) of services, importing USD 347.5 billion (+53.9% y-o-y) worth of goods and USD 76.1 billion worth services (+30.8% y-o-y). Preliminary estimates by the UAE government indicate that the UAE’s foreign trade is expected to reach about USD 599.4 billion by the end of 2022, marking a 15% growth compared to one year earlier. Moreover, for the first nine months of the year, non-oil exports accounted for almost 20% of the UAE's total trade, a significant jump from 11% just five years ago.

COVID-19 Country Response

Travel restrictions

Regularly updated travel information for all countries with regards to Covid-19 related entry regulations, flight bans, test and vaccines requirements is available on TravelDoc Infopage.
To find information about the current travel regulations, including health requirements, it is also advised to consult Travel Regulations Map provided and updated on a daily basis by IATA.

Import & export restrictions

A general overview of trade restrictions which were adopted by different countries during the COVID-19 pandemic is available on the International Trade Centre's COVID-19 Temporary Trade Measures webpage.

Economic recovery plan

For the general overview of the key economic policy responses to the COVID-19 pandemic (fiscal, monetary and macroeconomic) undertaken by the government of the United Arab Emirates, please consult the country's dedicated section in the IMF’s Policy Tracker platform.

Support plan for businesses

For an evaluation of impact of the Covid pandemic on SMEs and an inventory of country responses to foster SME resilience, refer to the OECD's SME Covid-19 Policy Responses document.
You can also consult the World Bank's Map of SME-Support Measures in Response to COVID-19.