Middle East & North Africa

UAE Economic Forecast

UAE Economic Outlook

Economic growth was likely robust but waned in H2 2022. Crude oil production in July–December grew at a softer annual pace than in the previous six months, as OPEC+ brought back quota cuts late last year. This likely reduced the oil sector’s contribution to growth. Regarding the non-oil sector, the private-sector PMI revealed conditions improved at a largely similar pace on average in H2 compared to H1. Economic activity should be slowing further so far this year. In January, oil production rose less than 4% year on year, while the PMI revealed that non-oil private-sector conditions improved at a softer pace in the first two months of 2023 relative to H2 last year. In geopolitics, the U.S. and other allies recently requested that the UAE stop reexports of critical goods to Russia; this could affect trade revenue.

UAE Inflation

Inflation in Dubai fell to 4.6% in January from 5.2% in December. Data for the UAE as a whole is not available past Q2 2022. However, in line with data for Dubai, price pressures in the UAE likely eased in recent months. Our panelists see overall inflation for the UAE moderating further in the coming quarters as external price pressures dim and interest rates rise.

UAE Economic Data

2017 2018 2019 2020 2021
Population (million) 9.3 9.4 9.5 9.9 10.2
GDP (USD bn) 390 427 418 349 415
GDP per capita (USD) 41 45 43 35 40
GDP (AED bn) 1 1 1 1 1
Economic Growth (Nominal GDP, ann. var. %) 5.8 9.4 -2.1 -16.4 18.8
Economic Growth (GDP, ann. var. %) 2.4 1.2 1.8 -3.0 3.9
Economic Growth (GDP non-Oil, ann. var. %) 4.2 0.1 2.7 -5.4 5.8
Economic Growth (GDP Oil, ann. var. %) -6.9 4.5 -2.6 -3.8 -0.7
Private Consumption (ann. var. %) 9.4 6.1 10.0 -12.5 -
Government Consumption (ann. var. %) 11.7 -5.0 10.0 0.7 -
Fixed Investment (ann. var. %) -17.3 3.6 0.0 5.8 -
Exports (G&S, ann. var. %) -2.5 11.5 -1.3 -7.0 -
Imports (G&S, ann. var. %) 3.0 10.9 -5.5 -6.4 -
Industrial Production (ann. var. %) -2.9 3.3 -0.8 -2.8 2.5
Oil Production (mn barrels per day, aop) 2.91 2.98 3.08 2.80 2.72
Unemployment (% of active population, aop) 2.5 2.4 2.2 3.2 3.4
Fiscal Balance (% of GDP) -1.7 1.1 0.4 -5.2 2.1
Public Debt (% of GDP) 21.6 20.9 27.1 39.7 34.7
Money (ann. var. of M2 %) 4.1 2.5 8.0 4.6 5.7
Inflation (CPI, ann. var. %, eop) 2.7 0.3 -1.4 -2.1 2.5
Inflation (CPI, ann. var. %, aop) 2.0 3.1 -1.9 -2.1 0.2
Base Rate (%, eop) 1.75 2.75 2.00 0.60 0.15
Stock Market (ann. var. of DFM %) -4.6 -24.9 9.3 -9.9 28.3
Exchange Rate (AED per USD, eop) 3.67 3.67 3.67 3.67 3.67
Current Account Balance (USD bn) 27.5 40.5 37.3 21.1 48.0
Current Account Balance (% of GDP) 7.0 9.5 8.9 6.0 11.6
Merchandise Trade Balance (USD bn) 80.9 85.6 80.4 60.3 79.0
Merchandise Exports (USD bn) 314 321 314 272 323
Merchandise Imports (USD bn) 233 235 233 212 244
Merchandise Exports (ann. var. %) 6.3 2.4 -2.3 -13.3 18.8
Merchandise Imports (ann. var. %) 2.7 1.2 -0.9 -9.2 15.3
Foreign Direct Investment (USD bn) 10.4 10.4 17.9 19.9 20.7
International Reserves (USD bn) 95 99 107 103 128
International Reserves (months of imports) 4.9 5.1 5.5 5.8 6.3

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