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).
|Main Indicators||2020||2021||2022 (E)||2023 (E)||2024 (E)|
|GDP (billions USD)||349.47||415.02||507.54||498.98||519.23|
|GDP (Constant Prices, Annual % Change)||-5.0||3.9||7.4||3.5||3.9|
|GDP per Capita (USD)||37,649||43,422||51,306||49,452||50,698|
|General Government Gross Debt (in % of GDP)||41.1||35.9||30.0||30.5||29.4|
|Inflation Rate (%)||-2.1||-0.1||4.8||3.4||2.0|
|Current Account (billions USD)||21.10||47.95||59.62||35.33||36.55|
|Current Account (in % of GDP)||6.0||11.6||11.7||7.1||7.0|
Source: IMF – World Economic Outlook Database, Latest data available.
Note : (E) Estimated data
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, with an agricultural area of only 390,000 ha (FAO). Hence, around 85% of UAE's food is imported. Fishing and date-growing are among the main agricultural activities.
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. Industry now comprises 47.5% of GDP and employs 34% of the workforce. The portion of GDP from the oil and gas sector has declined gradually (about 30% of GDP according to the 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. The sector suffered from the impacts of the COVID-19 pandemic; however, it rebounded strongly in 2022, thanks to the rise in global energy commodities.
The tertiary sector contributes 51.6% 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). This sector was severely affected by the COVID-19 pandemic and recorded a contraction. Despite that, tourism restarted growing following the lifting of travel restrictions and in the first half of 2022 the tourism revenue of the United Arab Emirates surpassed USD 5 billion and attracted nearly 6 million visitors who spent 25 million hotel nights, reflecting a growth of 10% compared to the same period in 2019 (before the pandemic).
|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)||0.9||47.5||51.6|
|Value Added (Annual % Change)||28.5||2.5||4.9|
Source: World Bank, Latest data available.
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The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.
The business rankings model measures the quality or attractiveness of the business environment in the 82 countries covered by The Economist Intelligence Unit’s Country Forecast reports. It examines ten separate criteria or categories, covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labour market and infrastructure.
The world rankings, published annually, measures violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire incorporating the main criteria (44 in total) to assess the situation of press freedom in a given country. This questionnaire was sent to partner organisations,150 RWB correspondents, journalists, researchers, jurists and human rights activists. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).
The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.
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.
Regularly updated travel information for all countries with regards to Covid-19 related 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 UK Foreign travel advice also provides comprehensive travelling abroad advice for all countries, including the latest information on health, safety, security, entry requirements and travel warnings.
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.
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.
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Latest Update: September 2023