United Arab Emirates Economic Forecast

United Arab Emirates Economic Outlook

January 11, 2022

Momentum likely picked up in Q4. The non-oil PMI averaged at a more than two-year high in the quarter and hotel occupancy rates surged through November amid the ongoing Expo 2020, while Dubai residential real estate dynamics also improved. Moreover, the oil sector benefited from rising production as OPEC+ curbs were eased, while higher oil prices buoyed government coffers—although the effect of higher prices on growth will likely be more restrained than in past years as the extra funds are channeled to longer-term investments rather than immediate spending. In addition, diversification efforts intensified in the quarter, with the latest reform a move to a Western-style working week. Nonetheless, heading into 2022 activity is likely being back by Omicron, with Abu Dhabi recently tightening entry requirements.

United Arab Emirates Economic Growth

Growth should speed up this year as oil output rises, with the non-oil sector offering further support: A high vaccination rate and the six-month Expo 2020 will boost spending, while the government’s reform agenda should boost investment. Regional tensions, potentially volatile oil prices and the Omicron variant are key risks. FocusEconomics panelists forecast GDP to expand 4.5% in 2022, which is up 0.1 percentage points from last month’s forecast, and 3.7% in 2023.

United Arab Emirates Economy Data

2015 2016 2017 2018 2019
Population (million)9.69.910.110.410.7
GDP per capita (USD)37,37536,22038,02740,47439,173
GDP (USD bn)358357386422421
Economic Growth (GDP, annual variation in %)5.13.12.41.21.7
Consumption (annual variation in %)-  -  -  -  -  
Investment (annual variation in %)4.38.8-17.33.60.0
Industrial Production (annual variation in %)6.03.2-0.81.63.1
Unemployment Rate1.91.62.52.22.6
Fiscal Balance (% of GDP)-3.4-2.8-2.02.0-  
Public Debt (% of GDP)18.720.220.019.1-  
Money (annual variation in %)5.53.34.12.57.9
Inflation Rate (CPI, annual variation in %, eop)3.61.22.70.3-1.4
Inflation Rate (CPI, annual variation in %)4.11.62.03.1-1.9
Policy Interest Rate (%)1.001.001.752.752.00
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)4.93.77.19.67.0
Current Account Balance (USD bn)17.613.227.540.529.6
Trade Balance (USD billion)76.668.467.285.674.8
Exports (USD billion)300295314321316
Imports (USD billion)224227246235241
Exports (annual variation in %)-12.4-1.86.32.4-1.6
Imports (annual variation in %)-4.91.28.7-4.52.5
International Reserves (USD)93.985.495.499.5108
External Debt (% of GDP)67.669.973.569.777.7

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United Arab Emirates Facts

Value Change Date
Exchange Rate3.670.0 %Dec 31
Stock Market0.10.75 %Jan 07

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