International
support

In more than 90 countries

United Arab Emirates

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. After contracting by an estimated -6.1% GDP in 2020, economic growth picked up in 2021 (2.2% GDP), supported by the UAE’s early and strong health response, continued supportive macroeconomic policies and a rebound in tourism and domestic activity related to the delayed Dubai Expo 2020 (IMF). Economic growth is expected to strengthen in 2022 and 2023 (3% GDP) thanks to a recovery in oil prices and production level. Regional tensions, potentially volatile oil prices and the Omicron variant are key risks to the outlook (Focus Economics).

In 2021, the UAE’s economy recovered from the deep but temporary recession triggered by the COVID-19 pandemic, lower oil prices and reduced oil production. The UAE promptly put in place supportive measures to mitigate the effects of the crisis, and continued its accommodative fiscal policy. The successful vaccination program boosted domestic consumption, and the construction and tourism sectors were stimulated by activity related to Dubai Expo 2020, held from October 2021 to March 2022. According to the IMF, the government net borrowing improved to -0.5% GDP in 2021 (from -5.6% in 2020) and is expected to further decrease to -0.2% and -0.1% in 2022 and 2023. The public debt is low but has increased rapidly in recent years, from 20.9% GDP in 2018 to 39.4% in 2020, according to IMF estimate. It decreased slightly in 2021 (37.3% GDP) and is forecast to remain under 40% GDP in 2022 (38.6%) and 2023 (38.9%). The public debt is expected to be funded mostly by tapping into the international capital markets (Coface), although the UAE’s Central Bank and sovereign wealth funds own important foreign assets, providing the country with a large liquidity cushion (Abu Dhabi holds world's fourth largest sovereign wealth fund) and making it a net creditor at global level. The deflation observed in 2020 (-2.1%) turned into a moderate inflation in 2021 (2%) which is forecast to remain stable in 2022 (2.2%) and 2023 (2.1%) (IMF). 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. Structural reforms are needed to move to a more environmentally sustainable growth model.

The UAE has one of the highest per capita income levels in the world and a highly developed welfare system. It also has one of the lowest rates of unemployment in the Middle East (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 employment of the local workforce. Nevertheless, unemployment rate among nationals continues to be considerably high compared to the rate among non-nationals (it varies according to emirate and is the highest in Abu Dhabi).

 
Main Indicators 201920202021 (e)2022 (e)2023 (e)
GDP (billions USD) 417.22e358.87410.16427.93443.25
GDP (Constant Prices, Annual % Change) 3.4e-6.12.23.03.0
GDP per Capita (USD) 43,90038,661e43,53844,75345,670
General Government Gross Debt (in % of GDP) 27.1e39.4e37.338.638.9
Inflation Rate (%) -1.9-2.10.23.72.8
Current Account (billions USD) 35.3711.06e39.6440.1138.95
Current Account (in % of GDP) 8.53.1e9.79.48.8

Source: IMF – World Economic Outlook Database , October 2021

Note: (e) Estimated Data

Country Risk

See the country risk analysis provided by La Coface.

 

+

Main Sectors of Industry

According to the latest figures from the World Bank, agriculture contributes to 0.9% of GDP and employs a mere 1% of the workforce, as most of the country is unsuitable for agriculture and animal husbandry. Hence, around 85% of UAE's food is imported. Fishing and date-growing are among the main agricultural activities. This sector was the most resilient to the COVID-19 pandemic.

Manufacturing activities have seen an unprecedented growth in recent years, particularly in sectors such as metal processing, furniture, industrial preparation of food stuffs, aluminium production, construction materials, fertilisers, the petrochemical industry, fibreglass and real estate. Industry now comprises 40.9% of GDP and employs 34% of the workforce. The portion of GDP from oil and gas sector has declined gradually (30% of GDP according to latest estimates) owing to a successful economic diversification policy. The United Arab Emirates is the world's 8th largest oil producer with significant reserves. Its oil and gas reserves are estimated to last approximately 100 years at the current rate of consumption. Since 2020, this sector has suffered from the impacts of the COVID-19 pandemic, OPEC+ oil production cuts, lower oil prices, reduced global oil demand, and disruption in global supply chains (World Bank), but it is expected to recover in 2022.

The tertiary sector contributes 58.2% of GDP and employs 64% 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 GDP, mainly driven by the emirate of Dubai (UAE Official Portal). Due to the COVID-19 pandemic, this sector contracted in 2020, as tourism, international transport and trade decreased sharply. The lifting of lockdown measures and the Dubai Expo to be held from October 2021 to March 2022 are expected to stimulate the sector in 2022.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 1.4 34.2 64.4
Value Added (in % of GDP) 0.7 46.2 53.1
Value Added (Annual % Change) 2.7 2.1 1.2

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.

 

+

Foreign Trade

The United Arab Emirates is among the world’s most dynamic markets in terms of foreign trade, with trade accounting for 168% of the GDP according to 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 of the Middle East. Oil products are by far the largest item of exports (the country is the world’s 5th oil exporter), followed by radio-telephony transmission tools, gold, jewellery and diamonds. Petroleum oils and gold are also among major imports, along with radio-telephony transmission tools, jewellery, transport equipment (mostly cars), diamonds, machinery and foodstuffs. Due to the COVID-19 pandemic, the volume of trade dropped sharply in 2020, but recovered in 2021. According to IMF estimates, the volume of exports of goods and services increased by 2.2% compared to 2020, while the volume of imports increased by 1.1%. The IMF forecast a rebound in the volume of trade in 2022, with exports increasing by 4.5% and imports by 5.3%.

Saudi Arabia is the top destination of Emirati exports, followed by Iraq, India, Switzerland, Oman and China. China, the United States, India, Japan and Germany are among 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, will positively impact trade. Bilateral trade between Israel and the UAE will reach USD 2 billion by 2022, up 50% from 2021, according to estimates by the UAE-Israel Business Council (Atalayar).

The United Arab Emirates has a structurally positive trade balance, but the surplus is closely linked to global oil prices. The UAE external balance on goods and services represented 26% of GDP in 2019 (World Bank). According to WTO data, in 2020 the UAE exported USD 319.3 billion worth of goods and USD 61.3 billion of services, importing USD 225.7 billion worth of goods and USD 58.2 billion worth services (Comtrade). Compared to 2018, exports of goods decreased by -2.9% in 2019, while imports increased by 3.6% (World Bank, latest data). Despite the ongoing COVID-19 pandemic, UAE’s non-oil foreign trade recorded a 27% growth in the first half of 2021 compared to the first half of 2020 (Emirates News Agency).

 
Foreign Trade Values 20162017201820192020
Imports of Goods (million USD) 225,000273,710261,538267,937225,741
Exports of Goods (million USD) 265,900313,547387,910389,373319,278
Imports of Services (million USD) 83,21370,58171,01486,86258,162
Exports of Services (million USD) 63,41769,58270,87889,28561,266

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

Foreign Trade Indicators 20152016201720182019
Foreign Trade (in % of GDP) 175.2176.7175.0159.7160.9
Imports of Goods and Services (Annual % Change) -5.72.73.010.93.6
Exports of Goods and Services (Annual % Change) 5.23.4-2.511.5-2.9
Imports of Goods and Services (in % of GDP) 74.475.775.466.768.5
Exports of Goods and Services (in % of GDP) 100.9101.099.693.092.5

Source: World Bank ; Latest available data

Foreign Trade Forecasts 20212022 (e)2023 (e)2024 (e)2025 (e)
Volume of exports of goods and services (Annual % change) 2.24.55.34.74.3
Volume of imports of goods and services (Annual % change) 1.15.35.64.44.5

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)
2020
Saudi Arabia 6.5%
India 3.4%
Switzerland 2.9%
Oman 2.9%
China 2.4%
See More Countries 81.8%
Main Suppliers
(% of Imports)
2020
China 16.0%
United States 6.7%
India 6.7%
Japan 3.8%
Germany 3.5%
See More Countries 63.4%

Source: Comtrade, Latest Available Data

 

+

Political Outline

Current Political Leaders
President: MUHAMMAD bin Rashid Al-Nuhayan (since May 2022)
Prime Minister and Vice-President: MUHAMMAD BIN RASHID Al-Maktum (since January 2006)
Next Election Dates
Presidential: n/a
Federal National Council (FNC): October 2023
Current Political Context
The UAE has enjoyed a rather stable general political situation despite continuous tensions with Iran, Qatar blockade, the conflict in Yemen and the crisis in Lebanon (Coface). In 2019, despite ongoing disputes both at the UN and the WTO, the Emirati authorities eased a ban on the shipping of goods between the UAE and Qatar. After an embargo of three and a half years, diplomatic relations have been officially restored between Qatar, Saudi Arabia, the UAE, Bahrain and Egypt in January 2021. The UAE and Bahrain signed a peace agreement with Israel in September 2020, paving the way for reciprocal investments particularly in the energy, agri-food, tourism, and ICT sectors (Coface). Along with Egypt and Jordan, the UAE became the third Middle Eastern country to recognize Israel. Diplomatic relations were officially restored with Iran in December 2021.
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. The Emir of Abu Dhabi, the biggest oil producing Emirate, was elected President of the UAE in 2004, succeeding his father. The Emir of Dubai has been nominated Vice-President and Prime Minister.
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.
 

+

COVID-19 Country Response

COVID-19 epidemic evolution

To find out about the latest status of the COVID-19 pandemic evolution and the most up-to-date statistics on the COVID-19 disease in the United Arab Emirates please visit the Department of Health’s Covid-19 webpage and the National Emergency Crisis and Disasters Management Authority pages with the official data.
For the international outlook you can consult the latest situation reports published by the World Health Organisation as well as the global daily statistics on the coronavirus pandemic evolution including data on confirmed cases and deaths by country.

Sanitary measures

To find out about the latest public health situation in the United Arab Emirates and the current sanitary measures in vigour, please visit the website of the Ministry of Health and that of the National Emergency Crisis and Disasters Management Authority.

Travel restrictions

The COVID-19 situation, including the spread of new variants, evolves rapidly and differs from country to country. All travelers need to pay close attention to the conditions at their destination before traveling. Regularly updated information for all countries with regards to Covid-19 related travel restrictions in place including entry regulations, flight bans, test requirements and quarantine is available on TravelDoc Infopage.
It is also highly recommended to consult COVID-19 Travel Regulations Map provided and updated on the daily basis by IATA.
The US government website of Centers of Disease Control and Prevention provides COVID-19 Travel Recommendations by Destination.
The UK Foreign travel advice also provides travelling abroad advice for all countries, including the latest information on coronavirus, safety and security, entry requirements and travel warnings.

Import & export restrictions

For the up-to-date information on all the measures applicable to movement of goods during the period of sanitary emergency due to the COVID-19 outbreak (including eventual restrictions on imports and exports, if applicable), please consult the website of Ministry of Economy. Further information is available in the section "Custom Measures" of KPMG's website.
For a general overview of trade restrictions due to COVID-19 pandemic, please consult the section dedicated to the UAE on the International Trade Centre's COVID-19 Temporary Trade Measures webpage.

Economic recovery plan

For information on the economic recovery scheme put in place by the UAE government to address the impact of the COVID-19 pandemic on the economy, refer to the website of the Central Bank of the UAE and to the official governmental platform U.AE, which provides information about the measures taken by each Emirate.
For the general overview of the key economic policy responses to the COVID-19 outbreak (fiscal, monetary and macroeconomic) taken by the UAE government to limit the socio-economic impact of the COVID-19 pandemic, please consult the section dedicated to the UAE in the IMF's Policy Tracker platform
.

Support plan for businesses

For information on the local business support scheme established by the Emirates government to help small and medium-sized companies to deal with the economic impacts of the COVID-19 epidemic on their activity, the official governmental platform U.AE provides information about the measures taken by each Emirate. Further information can be found on the website for the National Program for SMEs.
For a general overview of international SME support policy responses to the COVID-19 outbreak 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.

Support plan for exporters

For the up-to-date information on possible support plans for exporters in the UAE, if applicable, please consult the website of the Ministry of Economy, as well as the official governmental platform U.AE.

 

+