United Arab Emirates Economic Forecast

United Arab Emirates Economic Outlook

November 27, 2018

The economy likely accelerated in the third quarter, chiefly thanks to a combination of higher oil prices and rising output, coupled with a steady expansion in the non-oil economy. Though a recent plunge in prices might weigh on oil revenues in Q4, non-oil activity should remain robust as reflected by a broadly stable PMI and record-high business confidence in October. Overall, the country’s economic prospects appear bright over the next quarters, mainly buttressed by a flurry of business-friendly reforms which are poised to further entice foreign capital. On 30 October, the government enacted its long-awaited landmark investment reform, authorizing complete foreign ownership of firms in select sectors—though the full list of said sectors will only be finalized in Q1 2019—and introducing an investor dispute resolution mechanism.

United Arab Emirates Economic Growth

Multiple tailwinds are likely to propel growth next year. Notably, the recent investment reform could buttress FDI inflows by up to 20% annually, according to the Minister of Economy. Furthermore, economic activity should be buoyed by the largest-ever federal budget outlined for 2019, coupled with the ongoing infrastructure push related to the 2020 World Expo in Dubai—which will power the construction and tourism sectors. Finally, solid oil revenues should continue to support growth and help the government maintain a fiscal surplus. That said, the possible renewal of production cuts at the next OPEC meeting, on 6 December, could put a lid on oil-sector activity. Met the why particular panelists expect GDP to increase 3.2% in 2019, which is unchanged from last month’s forecast, and 3.3% in 2020.

United Arab Emirates Economy Data

20132014201520162017
Population (million)9.09.39.69.911.1
GDP per capita (USD)43,19143,33537,37535,378-  
GDP (USD bn)390113358349-  
Economic Growth (GDP, annual variation in %)5.83.33.83.01.5
Consumption (annual variation in %)5.212.3-19.1-11.3-  
Investment (annual variation in %)-5.711.94.32.3-  
Industrial Production (annual variation in %)3.60.96.84.3-  
Unemployment Rate2.82.42.11.61.7
Fiscal Balance (% of GDP)8.41.9-3.4-2.5-1.8
Public Debt (% of GDP)15.715.518.720.7-  
Money (annual variation in %)22.87.95.53.34.1
Inflation Rate (CPI, annual variation in %, eop)1.43.13.61.22.7
Inflation Rate (CPI, annual variation in %)1.12.44.11.62.0
Policy Interest Rate (%)1.001.001.001.001.75
Exchange Rate (vs USD)3.673.673.673.673.67
Exchange Rate (vs USD, aop)3.673.673.673.673.67
Current Account (% of GDP)18.313.34.72.4-  
Current Account Balance (USD bn)71.253.616.78.4-  
Trade Balance (USD billion)11111876.668.3-  
Exports (USD billion)371343300299-  
Imports (USD billion)231235224230-  
Exports (annual variation in %)3.2-7.6-12.4-0.6-  
Imports (annual variation in %)5.91.7-4.62.9-  
International Reserves (USD)68.278.493.985.4-  
External Debt (% of GDP)44.348.360.862.2-  

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United Arab Emirates Facts

ValueChangeDate
Exchange Rate3.670.0 %Dec 14
Stock Market0.30.75 %Dec 14

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