Economic Trends/Outlook in the U.A.E.

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Economic Overview

The GDP growth rate was very high during the last decade, as it tripled in 5 years, from 87 to 275 billion USD. The UAE have the fourth highest per capita GDP in the world.

The GDP is dominated by the economic power Abu Dhabi (60%), especially by its hydrocarbon production (this emirate hold 9% of the world oil reserves and 5% of the planet’s natural gas reserves) and by its control of nearly all the country’s savings. Dubai contributes to up to 26% of the GDP and constitutes the Emirates’ commercial platform, mostly due to its port and airport infrastructures. The government is trying to develop new sectors, such as tourism, financial services and real estate. In this perspective, the Emirate of Dubai has multiplied the creation of free zones and is becoming a platform for re-export in the region. There is also a number of great cultural projects (museums, especially an annex of the Louvre museum) and sport projects (Formule 1). Moreover, the country has decided to diversify its energy sources by building a fleet of nuclear power plants by 2017 and massively investing in renewable energies, with 22 billion USD for the “Masdar” project.

UAE was nevertheless hit hard by the global economic crisis, which has caused a felt slowdown of the country’s growth. Different factors are at cause: falling oil prices, a contraction of private sector activity, the bursting of the housing bubble in Dubai because of overinvestment, the scarcity of supply of bank credit. Moreover, Dubai was the hardest hit, due to its position of a highly globalized platform and very high borrowing rates. However, the authorities have reacted. The banking sector was consolidated through state guarantees on deposits, introduction of liquidity, recapitalization of banks, and an expansionary fiscal policy (to preserve investments and enhance competitiveness).

Main Indicators 2009 2010 2011 2012 2013
GDP (billions USD) 270.33 301.88e 363.82e 384.20e 402.61e
GDP (Constant Prices, Annual % Change) -3.2 3.2e 3.3e 3.8e 4.0e
GDP per Capita (USD) 55,081e 59,717e 69,872e 71,638e 72,884e
General Government Gross Debt (in % of GDP) 22.5 21.0e 16.4e 14.5e 13.7e
Inflation Rate (%) 1.6 0.9e 4.5e 3.0e 2.5e
Current Account (in % of GDP) -3.1e 7.8e 7.7e 10.5e -

Source: IMF - World Economic Outlook Database

Note: (e) Estimated Data


Main Sectors of Industry

Agriculture contributes to less than 3% of the GDP. Raw material exploration accounts for nearly 36% of the GDP. United Arab Emirates is the 3rd largest oil producer in the world, with large reserves. Presently, their oil and gas reserves are estimated for 100 years of exploitation.

Manufacturing activities have witneesed an unprecedented growth in the last five years, particularly in sectors such as metal processing, furniture, industrial preparation of food stuffs, aluminum production, cement and construction materials, fertilisers, petrochemical industry, fiberglass and finally real estate.

As for tertiary sector, it contributes around 40% of the GDP and is dominated by international trade, air transport, tourism and financial activities.

Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 4.9 39.8 54.4
Value Added (in % of GDP) 1.8 60.6 37.6
Value Added (Annual % Change) 5.0 10.3 7.6

Source: World Bank - Last Available Data.

For more detailed background on Industries in the United Arab Emirates, click here.

Indicator of Economic Freedom

Moderately free
World Rank:
Regional Rank:

Distribution of Economic freedom in the world
Source: 2011 Index of Economic freedom, Heritage Foundation


Country Risk

See the Country Risk Analysis Provided By Ducroire.


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