Economic Overview

The United Arab Emirates’ economy rebounded well from the COVID-19 crisis, growing 7.9% in 2022 and an estimated 3.4% in 2023, fueled by robust domestic activity. Forecasts for 2024 indicate a non-hydrocarbon GDP growth surpassing 4%, driven by the tourism, construction, and real estate sectors. Anticipated for 2024 is a 7% year-on-year increase in tourism receipts, reaching USD 43.7 billion (around 9% of the GDP). This surge is poised to further contribute to a rise in private consumption. Conversely, government consumption, accounting for approximately 12% of the GDP, will primarily focus on business reforms and incentives, rather than implementing stimulus programs to boost consumption. For the year as a whole, the IMF forecasts growth at 4%, followed by 4.2% in 2025.

The UAE’s public finances are sound. Supported by elevated oil prices, both fiscal and external surpluses maintain their strength. Projections for 2023 indicate a fiscal balance of around 5% of GDP, underpinned by robust economic activity and oil revenue. The gradual implementation of a corporate income tax, initiated in June 2023, is poised to contribute to increased non-oil revenue in the medium term. The consolidated UAE government debt-to-GDP ratio decreased to 29.4% of GDP in 2023 (from 31.1% one year earlier) and should follow a downward trend over the forecast horizon (28.3% by 2025). This decline is further influenced by the Dubai Emirate's commitment to reducing its public debt by EAD 29 billion in accordance with its Public Debt Sustainability Strategy. Simultaneously, the current account surplus is anticipated to surpass the medium-term level significantly in both 2023 and 2024. Nevertheless, the seven Emirates have varied debt profiles, with the Emirate of Dubai recording the highest level, at 78% 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 2023, inflationary pressures moderated gradually to reach 3.1%; albeit a further reduction is expected for 2024 (2.3% as per the IMF projections), increasing rental prices are expected to exert upward pressure on the housing component of the CPI basket. As a result, inflation is likely to remain above the average observed in 2020-2022, which hovered around 1.3%.

The UAE has one of the highest per capita income levels in the world (estimated at USD 88,962 in 2023 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 2.8% 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, which accounts 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. According to the World Trade Outlook and Statistics report by the WTO, in 2022, the UAE ranked 11th globally in goods exports, totalling USD 599 billion, representing 2.4% of global merchandise exports and a growth of 41%. The country also ranked 18th in merchandise imports, reaching USD 425 billion, contributing to 1.7% of world merchandise imports, with a 22% increase. In the realm of services, the UAE was ranked 12th globally in service exports in 2022, amounting to USD 154 billion, making up 2.2% of the world's total service exports. Additionally, the country secured the 18th spot in service imports, totalling USD 95 billion, constituting 1.5% of global service imports. Oil products are by far the largest item of exports (the country is the world’s 4th oil exporter), followed by gold, telephone sets, diamonds, and motor cars. Gold is also among the major imports, along with telephones, diamonds, and motor cars (data Comtrade).

Saudi Arabia is the top destination of Emirati exports (5.4%), followed by India (4.9%), Iraq (4.2%), the U.S. (2.2%), Oman (2.1%), and Hong Kong (2%). China (16%), India (6.5%), the United States (5.1%), Japan (2.9%) and Turkey (2.3%) are among the UAE's main suppliers of goods and services (data Comtrade 2022). Recently, the country 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 2022, the country recorded a trade surplus accounting for 25.3% of its GDP (World Bank). Preliminary estimates by the UAE government indicate that non-oil foreign trade reached a record AED 1.239 trillion in H1 2023, representing a growth of 14.4% compared to the same period in 2022 and 3% more than H2 2022. The contribution of non-oil exports to the UAE's total foreign trade was 16.6% in H1 2023. Re-exports and imports in the UAE also saw notable expansions: the total value of re-exports amounted to AED 341 billion, marking a 9.9% growth compared to H1 2022 and a 2.2% increase from the second half of 2022. Imports surged to AED 693 billion, indicating a 17.5% rise compared to H1 2022 and a 2.6% uptick from the second half of 2022. China maintained its status as the top global trading partner for the UAE, with India, the U.S., and Saudi Arabia following closely behind.

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.