United Arab Emirates

ECONOMICS


The UAE has an open economy with a high per capita income and a sizable annual trade surplus. Successful efforts at economic diversification have reduced the portion of GDP from the oil and gas sector to 30%.

Since the discovery of oil in the UAE nearly 60 years ago, the country has undergone a profound transformation from an impoverished region of small desert principalities to a modern state with a high standard of living. The government has increased spending on job creation and infrastructure expansion and is opening up utilities to greater private sector involvement. The country's free trade zones - offering 100% foreign ownership and zero taxes - are helping to attract foreign investors.

The global financial crisis of 2008-09, tight international credit, and deflated asset prices constricted the economy in 2009. UAE authorities tried to blunt the crisis by increasing spending and boosting liquidity in the banking sector. The crisis hit Dubai hardest, as it was heavily exposed to depressed real estate prices. Dubai lacked sufficient cash to meet its debt obligations, prompting global concern about its solvency and ultimately a $20 billion bailout from the UAE Central Bank and Abu Dhabi Government that was refinanced in March 2014.

The UAE’s dependence on oil is a significant long-term challenge, although the UAE is one of the most diversified countries in the Gulf Cooperation Council. Low oil prices have prompted the UAE to cut expenditures, including on some social programs, but the UAE has sufficient assets in its sovereign investment funds to cover its deficits. The government reduced fuel subsidies in August 2015, and introduced excise taxes (50% on sweetened carbonated beverages and 100% on energy drinks and tobacco) in October 2017. A five-percent value-added tax was introduced in January 2018. The UAE's strategic plan for the next few years focuses on economic diversification, promoting the UAE as a global trade and tourism hub, developing industry, and creating more job opportunities for nationals through improved education and increased private sector employment.

 

 

1990 2000 2010 2018
GNI, Atlas method (current US$) (billions) .. 98.42 285.53 394.97
GNI per capita, Atlas method (current US$) .. 31,400 33,390 41,010
GNI, PPP (current international $) (billions) .. 270.24 463.51 725.23
GNI per capita, PPP (current international $) .. 86,230 54,210 75,300
GDP (current US$) (billions) 50.7 104.34 289.79 414.18
GDP growth (annual %) 18.3 10.9 1.6 1.4
Inflation, GDP deflator (annual %) 3.3 11.5 12.5 6.7
Agriculture, forestry, and fishing, value added (% of GDP) 1 2 1 1
Industry (including construction), value added (% of GDP) 59 49 53 47
Exports of goods and services (% of GDP) .. 49 78 94
Imports of goods and services (% of GDP) .. 41 64 68
Gross capital formation (% of GDP) .. 23 27 22
Revenue, excluding grants (% of GDP) .. 6.5 3.4 3.5
Net lending (+) / net borrowing (-) (% of GDP) .. 0.1 0.1 0.2
States and markets
Time required to start a business (days) .. 19 15 4
Domestic credit provided by financial sector (% of GDP) 23.2 28.9 93 91.3
Tax revenue (% of GDP) .. 1.1 0.3 0.1
Military expenditure (% of GDP) .. 8.3 6 ..
Mobile cellular subscriptions (per 100 people) 1.8 45.3 132.1 210.9
Individuals using the Internet (% of population) 0 23.6 68 94.8
High-technology exports (% of manufactured exports) 0 0 4 2
Statistical Capacity score (Overall average) .. .. .. ..
Global links
Merchandise trade (% of GDP) 69 81 138 145
Net barter terms of trade index (2000 = 100) .. 100 159 155
External debt stocks, total (DOD, current US$) (millions) .. .. .. ..
Total debt service (% of exports of goods, services and primary income) .. .. .. ..
Net migration (thousands) 368 1,161 480 301
Personal remittances, received (current US$) (millions) .. .. .. ..
Foreign direct investment, net inflows (BoP, current US$) (millions) -116 -506 8,797 10,354
Net official development assistance received (current US$) (millions) 3.5 .. .. ..