Middle East & North Africa

UAE Economic Forecast

UAE Economic Outlook

Year-on-year GDP growth should have softened further in Q2 after a projected slowdown in Q1: GDP in Abu Dhabi—which has by far the largest economy of the seven emirates—expanded 3.9% year on year in Q1 (Q4 2022: +5.9% yoy). Nationwide, oil production contracted over 3% year on year in Q2—the steepest decline in two years—largely due to a voluntary production cut from 1 May. As such, the oil sector likely dragged on overall GDP, while the non-oil sector remained the engine of growth: The non-oil private-sector PMI was higher in Q2 than in Q1 amid improving demand. Moving into Q3, the dynamics remained largely unchanged from Q2: In July, year-on-year crude production fell at the sharpest pace in 27 months, the PMI remained comfortably in expansionary terrain and inflation in Dubai softened, which should support spending despite higher interest rates.

UAE Inflation

Softer price increases for food and a steeper decline in prices for transport pushed inflation in Dubai down to a 20-month low of 1.0% in July (June: 2.1%). Countrywide data is unavailable for H1 2023, but in line with the trend in Dubai, inflation should have eased so far in 2023. Tighter monetary policy and slowing activity should keep a lid on price increases ahead.

This chart displays Economic Growth (GDP, annual variation in %) for UAE from 2013 to 2022.

UAE Economic Data

2018 2019 2020 2021 2022
Population (million) 9.4 9.5 9.3 9.6 9.9
GDP (USD bn) 427 418 349 415 507
GDP per capita (USD) 45,583 43,973 37,644 43,430 51,253
GDP (AED bn) 1,568 1,535 1,283 1,525 1,862
Economic Growth (Nominal GDP, ann. var. %) 9.4 -2.1 -16.4 18.8 22.1
Economic Growth (GDP, ann. var. %) 1.3 1.1 -5.0 4.4 7.9
Economic Growth (GDP non-Oil, ann. var. %) 0.1 2.7 -5.4 6.5 7.2
Economic Growth (GDP Oil, ann. var. %) 4.5 -2.6 -3.8 -1.1 9.5
Private Consumption (ann. var. %) 6.1 10.0 -12.5 - -
Government Consumption (ann. var. %) -5.0 10.0 0.7 - -
Fixed Investment (ann. var. %) 3.6 0.0 5.8 - -
Exports (G&S, ann. var. %) 11.5 -1.3 -7.0 - -
Imports (G&S, ann. var. %) 10.9 -5.5 -6.4 - -
Industrial Production (ann. var. %) 3.3 -0.8 -2.8 2.6 8.5
Oil Production (mn barrels per day, aop) 3.0 3.1 2.8 2.7 3.1
Unemployment (% of active population, aop) 2.2 2.3 4.3 3.1 2.8
Fiscal Balance (% of GDP) 3.8 2.6 -2.5 4.0 9.0
Public Debt (% of GDP) 21.3 26.8 41.1 35.9 30.0
Money (ann. var. of M2 %) 2.5 8.0 4.6 5.7 9.0
Inflation (CPI, ann. var. %, eop) 1.1 -1.6 -2.2 2.3 4.6
Inflation (CPI, ann. var. %, aop) 3.1 -2.0 -2.1 0.2 4.8
Base Rate (%, eop) 2.75 2.00 1.25 1.50 4.40
Stock Market (ann. var. of DFM %) 11.7 3.3 -0.6 68.2 20.3
Exchange Rate (AED per USD, eop) 3.67 3.67 3.67 3.67 3.67
Current Account Balance (USD bn) 40.5 37.3 21.1 48.0 -
Current Account Balance (% of GDP) 9.5 8.9 6.0 11.6 -
Merchandise Trade Balance (USD bn) 85.6 80.4 60.3 79.0 -
Merchandise Exports (USD bn) 321 314 272 323 -
Merchandise Imports (USD bn) 235 233 212 244 -
Merchandise Exports (ann. var. %) 2.4 -2.3 -13.3 18.8 -
Merchandise Imports (ann. var. %) 1.2 -0.9 -9.2 15.3 -
Foreign Direct Investment (USD bn) 10.4 17.9 19.9 20.7 22.7
International Reserves (USD bn) 99.2 107.3 103.2 127.9 134.1
International Reserves (months of imports) 5.1 5.5 5.8 6.3 -

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