United Arab Emirates Economic Forecast

United Arab Emirates Economic Outlook

July 31, 2018

Economic activity appears to have been robust in Q2, supported by a pick-up in oil production, recent pro-business reforms and solid activity in the non-oil sector. The PMI rose to its highest level of the year in June, while in the same month the UAE exceeded its OPEC oil production target for the first time in 2018. New policies implemented in recent months—including a visa reform in May, a joint investment plan with Saudi Arabia, a large stimulus package in Abu Dhabi, and several measures aimed at cutting red tape and increasing the ease of doing business—have also been supportive of business confidence, which hit the highest level on record in the June PMI. Moreover, while employment growth remained negligible throughout the quarter, it appears poised to increase in Q3 as backlogs of work have reached historic highs. On July 29, the Abu Dhabi government announced it would allow GCC nationals to apply for its business license scheme without requiring an office and increased the scope of eligible industries, in a bid to reduce firm set-up costs and further attract new businesses.

United Arab Emirates Economic Growth

Growth in the non-oil economy should accelerate this year on the back of strong investment. Notably, the large infrastructure push underway as part of the country’s preparation to host the 2020 World Expo, recent business-friendly reforms and stimulus, and a new investment law to be unveiled in Q4—which will authorize complete foreign ownership of firms in select sectors—will likely buttress investor confidence and provide a large boost to FDI inflows. In addition, the country can count on the dynamism of its tourism sector, especially in Dubai. Met the why particular panelists expect GDP to increase 2.6% in 2018, which is unchanged from last month’s forecast, and 3.2% in 2019.

United Arab Emirates Economy Data

Population (million)
GDP per capita (USD)43,19143,33537,37535,378-  
GDP (USD bn)390113358349-  
Economic Growth (GDP, annual variation in %)
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 %)  
Unemployment Rate2.
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 %)
Inflation Rate (CPI, annual variation in %, eop)
Inflation Rate (CPI, annual variation in %)
Policy Interest Rate (%)
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

Exchange Rate3.670.0 %Aug 15
Stock Market0.40.75 %Aug 15

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