United Arab Emirates Economic Forecast

United Arab Emirates Economic Outlook

May 8, 2018

Economic growth in the non-oil sector appears to have moderated somewhat in Q1 after the government implemented VAT in January, with PMI data pointing to slowing output growth throughout the quarter. The tourism sector seems to have performed particularly well in Dubai, however, momentum in construction in the city likely slowed in Q1. This unexpected slowdown could be worrying if sustained, especially given the high level of infrastructure investment by the government in preparation for the 2020 World Expo. Nevertheless, the PMI and forward-looking business confidence improved in April, and a flurry of measures announced on 14 April by the government of Dubai, aimed at reducing the cost of doing business and cutting red tape, should help renew economic momentum in the coming quarters.

United Arab Emirates Economic Growth

Looser fiscal policy, and notably large investments in infrastructure, should prop up growth in the non-oil economy this year by supporting private investment momentum, while a new investment law set to be unveiled by the end of year should further boost FDI inflows. This, along with higher oil prices and tourism, is poised to help private consumption bounce back from the VAT implementation. On the other hand, the OPEC agreement should keep oil output largely stable in the year. The main risks are a flare up of regional tensions, which could harm investment, and a downturn in oil prices. Met the why particular panelists expect GDP to increase 2.7% in 2018, which is down 0.2 percentage points from last month’s forecast, and 3.2% in 2019.

United Arab Emirates Economy Data

Population (million)
GDP per capita (USD)42,13642,33637,743-  -  
GDP (USD bn)381394362-  -  
Economic Growth (GDP, annual variation in %)  
Consumption (annual variation in %)-1.625.3-13.111.7-  
Investment (annual variation in %)  
Industrial Production (annual variation in %)  -  
Unemployment Rate4.  
Fiscal Balance (% of GDP)11.45.0-2.1-  -  
Public Debt (% of GDP)15.815.618.119.3-  
Money (annual variation in %)  
Inflation Rate (CPI, annual variation in %, eop)  
Inflation Rate (CPI, annual variation in %)  
Policy Interest Rate (%)  
Exchange Rate (vs USD)3.673.673.673.67-  
Exchange Rate (vs USD, aop)3.673.673.673.67-  
Current Account (% of GDP)19.514.94.72.4-  
Current Account Balance (USD bn)74.158.717.011.1-  
Trade Balance (USD billion)14112876.668.3-  
Exports (USD billion)371368300299-  
Imports (USD billion)230211224230-  
Exports (annual variation in %)3.1-0.9-12.4-0.6-  
Imports (annual variation in %)5.54.3-4.62.9-  
International Reserves (USD)68.278.493.985.4-  
External Debt (% of GDP)44.348.860.2-  -  

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United Arab Emirates Facts

Exchange Rate3.670.0 %May 16
Stock Market0.40.75 %May 16

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