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United Arab Emirates

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Economic and political overview

Economic Overview

The United Arab Emirates has transformed from a modest desert economy into a global hub for trade, finance, tourism, and innovation, underpinned by its vast oil wealth and dynamic diversification efforts. Strategic reforms, free trade zones, and robust global investments continue to drive the nation’s growth and attract international business. Following a rate of 3.6% in 2023, the country’s GDP growth accelerated to 4% in 2024 as the 16 non-oil sectors continued their steady growth pattern over the course of the year. According to the IMF, short-term growth is robust and projected to stay strong at approximately 4% in 2025, despite lower-than-anticipated oil production due to OPEC+ agreements. Non-hydrocarbon sectors are supported by tourism, construction, public spending, and steady expansion in financial services. Capital inflows continue to be strong, driven by social and business-friendly reforms, fueling ongoing demand for real estate and contributing to the rise in house prices across various segments and locations.

The country’s public finances are sound, with moderate consolidated public debt level, strong net external asset position and high GDP per capita. Hydrocarbon revenues are expected to decline due to fluctuating oil prices and lower oil production, but fiscal and external surpluses are forecast to stay strong. The fiscal surplus is projected to decrease slightly to around 4% of GDP in 2025, down from an estimated 5% in the previous year. However, non-hydrocarbon revenues are set to grow steadily, driven by the continued implementation of corporate income tax. Public debt remains stable at approximately 30% of GDP. The current account surplus is expected to be around 7.5% of GDP, while international reserves remain robust, covering over 8.5 months of imports. Banks continue to be well-capitalized and liquid, with asset quality improving further in 2024. Strong domestic activity and sustained demand for credit have bolstered banks' profitability, despite elevated interest rates. 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. After rising to 2.3% in 2023, up from 1.6% the previous year, inflation is expected to remain stable at around 2.0% in 2025, despite higher costs related to housing and utilities (IMF).

The UAE has one of the highest per capita income levels in the world (estimated at USD 82,000 in 2024 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 2.2% in 2023 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).

 
Main Indicators 2023 (E)2024 (E)2025 (E)2026 (E)2027 (E)
GDP (billions USD) 514.13545.05568.57601.76636.71
GDP (Constant Prices, Annual % Change) 3.64.05.15.14.7
GDP per Capita (USD) 48,14149,55051,29453,88956,613
General Government Gross Debt (in % of GDP) 32.431.431.330.730.2
Inflation Rate (%) 1.62.32.12.02.0
Current Account (billions USD) 54.8347.9246.8947.9246.54
Current Account (in % of GDP) 10.78.88.28.07.3

Source: IMF – World Economic Outlook Database , October 2021

Country Risk

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Main Sectors of Industry

According to the latest figures from the World Bank, agriculture contributes to a mere 0.7% of GDP and employs 1% of the workforce, as most of the country is unsuitable for agriculture and animal husbandry, with an agricultural area of only 390,000 ha (FAO). Hence, around 90% of UAE's food is imported (USDA). Fishing and date-growing are among the main agricultural activities. Despite limited water resources, the UAE government continues to look for new technologies to support the local production of certain strategic commodities.

Manufacturing activities have seen unprecedented growth in recent years, particularly in sectors such as metal processing, furniture, industrial preparation of foodstuffs, aluminium production, construction materials, fertilisers, the petrochemical industry, fibreglass and real estate development. Industry now comprises 47.7% of GDP and employs 30% of the workforce. The portion of GDP from the oil and gas sector has declined gradually (to about 30%, according to the latest estimates) owing to a successful economic diversification policy. The United Arab Emirates is the world's 7th largest oil producer with significant reserves: its oil and gas reserves are estimated to last approximately 100 years at the current rate of consumption. “Operation 300bn”, a 10-year strategy developed by the Ministry of Industry and Advanced Technology (MoIAT), seeks to expand the contribution of the industrial sector to AED 300 billion by 2031. Manufacturing plays a significant role in the UAE's GDP, ranking as the third-largest sector by nominal GDP share. In 2023, manufacturing contributed nearly 10% to the overall nominal GDP of the UAE, with Dubai and Abu Dhabi showing slightly lower proportions at around 8.7% and 6%, respectively; whereas Emirates like RAK and Sharjah have substantial industrial activities. According to the Ministry of Industry, in 2024, the industrial sector's contribution to the UAE's GDP has risen by 57%, with forecasts surpassing AED 210 billion. Industrial exports have also shown strong growth, climbing 63% and expected to exceed AED 190 billion.

The tertiary sector contributes 51.6% of the GDP and employs 69% of the workforce. The main sub-sectors are international trade, air transport, financial activities and tourism. The travel and tourism sector, in particular, has a total contribution of around 12% of the GDP (UAE Official Portal), mainly driven by the Emirate of Dubai, which received 18.72 million international visitors in 2024, up 9% y-o-y. The banking and financial sector is also pivotal: according to Fitch Ratings, UAE banks' financial metrics are benefiting from favourable operating conditions, driven by stable oil prices, controlled inflation, and high interest rates. The banking sector performed exceptionally well in 1H24, with most major banks reporting record-high profits. Lastly, aviation is a key pillar and major driver of Dubai's economic growth. Led by Emirates Group, Dubai Airports, and other aviation entities, the sector supported 631,000 jobs and contributed over AED 137 billion to Dubai's economy in 2023.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 1.3 29.6 69.0
Value Added (in % of GDP) 0.7 47.7 51.6
Value Added (Annual % Change) 0.9 0.8 6.5

Source: World Bank - Latest available data.

 
Monetary Indicators 20162017201820192020
UAE Dirham (AED) - Average Annual Exchange Rate For 1 USD 3.673.673.673.703.67

Source: World Bank - Latest available data.

 

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Foreign Trade

The United Arab Emirates is among the world’s most dynamic markets in terms of foreign trade, which accounts for 202% 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. According to the World Trade Outlook and Statistics report by the WTO, in 2023, the UAE ranked 14th globally in goods exports, accounting for 2.4% of global merchandise exports, and 16th in imports. Oil products are by far the largest item of exports (the country is the world’s 4th oil exporter globally), followed by gold, petroleum gas, telephone sets, diamonds and jewellery, and motor cars. Gold is also among the major imports, along with telephones, motor cars, and diamonds (data Comtrade for 2023).

Saudi Arabia is the top destination of Emirati exports (5.2%), followed by India (4.4%), Iraq (4%), Turkey (3.3%), Hong Kong (2.5%), and the U.S. (2.4%). China (16.5%), India (6.5%), the United States (5.7%), Turkey (3.8%) and Japan (3.2%) are among the UAE's main suppliers of goods and services (data Comtrade 2023). The UAE, within the GCC framework, has signed GCC Free Trade Agreements with many countries including New Zealand, Singapore, and EFTA countries. Negotiations are currently underway with several countries and trade groups, including the European Union, Japan, China, Korea, Australia, Pakistan, India, Turkey, and the Mercosur member countries (Argentina, Brazil, Paraguay and Uruguay).

The United Arab Emirates has a structurally positive trade balance, but the surplus is closely linked to global oil prices. In 2023, the country recorded a trade surplus accounting for 14.9% of its GDP (from 18.7% one year earlier - World Bank). In the same year, exports decreased by 5.4%, to USD 487.7 billion, due to lower energy prices; while imports rose to USD 448.6 billion (+6.7% y-o-y). Preliminary estimates by the UAE government indicate that the country’s foreign trade hit a historic AED 3 trillion milestone by the end of 2024, driven by record non-oil trade of AED 2.997 trillion (USD 815.7 billion), up 14.6% from 2023. Non-oil exports surged 27.6% to AED 561.2 billion, raising their share of total trade to 18.7%. Re-exports grew 7.3% to AED 734.4 billion, while non-oil imports climbed 14.2% to AED 1.701 trillion.

 
Foreign Trade Values 20192020202120222023
Imports of Goods (million USD) 288,447246,961347,529420,493448,688
Exports of Goods (million USD) 389,428335,297425,160515,621487,778
Imports of Services (million USD) 88,19661,86576,10696,917n/a
Exports of Services (million USD) 90,26578,121101,838154,667n/a

Source: World Trade Organisation (WTO) ; Latest available data

Foreign Trade Indicators 20192020202120222023
Foreign Trade (in % of GDP) 170.1185.3186.1188.9202.3
Imports of Goods and Services (Annual % Change) 5.75.18.125.912.6
Exports of Goods and Services (Annual % Change) 0.83.84.18.56.9
Imports of Goods and Services (in % of GDP) 73.285.183.785.193.7
Exports of Goods and Services (in % of GDP) 96.9100.2102.4103.8108.6

Source: World Bank ; Latest available data

Foreign Trade Forecasts 20242025 (e)2026 (e)2027 (e)2028 (e)
Volume of exports of goods and services (Annual % change) 4.15.24.94.84.9
Volume of imports of goods and services (Annual % change) 3.73.14.04.45.0

Source: IMF, World Economic Outlook ; Latest available data

Note: (e) Estimated Data

 
International Economic Cooperation
The United Arab Emirates is a member of the following international economic organisations: Gulf Cooperation Council (GCC), ICC, Arab Bank for Economic Development in Africa (ABEDA), IMF, Arab Fund for Economic and Social Development (AFESD), G-77, Arab Monetary Fund (AMF), WTO, Arab League, among others. For the full list of economic and other international organisations in which participates the United Arab Emirates click here. International organisation membership of the United Arab Emirates is also outlined here.
Free Trade Agreements
The complete and up-to-date list of Free Trade Agreements signed by the United Arab Emirates can be consulted here.
 

Main Partner Countries

Main Customers
(% of Exports)		 2023
Saudi Arabia 5.2%
India 4.4%
Türkiye 3.3%
Hong Kong SAR, China 2.5%
United States 2.4%
See More Countries 82.3%
Main Suppliers
(% of Imports)		 2023
China 16.5%
India 6.5%
United States 5.7%
Türkiye 3.8%
Japan 3.2%
See More Countries 64.4%

Source: Comtrade, Latest Available Data

 

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Political Outline

Current Political Leaders
President: Sheikh Mohamed bin Zayed Al Nahyan (since May 2022)
Prime Minister and Vice-President: Sheikh Mohammed bin Rashid Al Maktoum (since January 2006)
Next Election Dates
Presidential: 2027
Federal National Council (FNC): October 2027
Current Political Context
Following the appointment of Sheikh Khalid, the eldest son of the Head of the Federation and Abu Dhabi, as Crown Prince of Abu Dhabi in May 2023, the UAE is anticipated to maintain political stability and position him as a possible successor to the presidency of the Federation. The nation's position as a regional and international center for trade, banking, and logistics is expected to be strengthened by this stability. However, it is anticipated that issues with inadequate openness and democratic practices would persist.
The UAE has both chances and risks as a result of the post-Assad developments in Syria. On the one hand, the rehabilitation effort can open up new opportunities for energy and construction firms established in the UAE. However, changes in the Syrian government could lead to a realignment of power in the region and a rise in unpredictability, which could have an impact on the business environment as a whole.
While the UAE has criticized certain actions of Israel's military and Prime Minister Netanyahu, it continues to maintain diplomatic and economic ties with Israel. Furthermore, the UAE has engaged in discussions with the United States and Israel regarding the establishment of a provisional government in post-war Gaza.
Main Political Parties
There are no political parties in the UAE.
Executive Power
Each Emirate is governed by an Emir and has its own administration. Every Emir manages his Emirate's resources autonomously.
The Federal Supreme Council, composed of the 7 emirate rulers, is the highest authority of the UAE and holds legislative and executive powers. President and vice president are indirectly elected by the Federal Supreme Council for a 5-year term, with no term limits.
Legislative Power
There is only one Chamber: the Federal National Council. It consists of 40 members of which 20 are appointed by the rulers of the seven Emirates, and 20 are indirectly elected, whereby each Emirate has a number of representatives equivalent to its demographic weight. Their mandate is for four years. This council has only consultative functions.
 

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