United Arab Emirates Economic Forecast

United Arab Emirates Economic Outlook

September 8, 2020

The economy is set to have contracted at a sharper pace in the second quarter, following Q1’s marked downturn, due to the impact of the Covid-19 pandemic. The joint effect of collapsing oil prices, falling oil production and global travel restrictions hammered economic activity in Q2. Moving into Q3, data suggests a recovery is underway: Although the PMI dipped in August, output and new orders continued to expand; Dubai reopened to international tourists in early July; and food outlets in Abu Dhabi have been operating at almost full capacity since late July. Moreover, on 8 August, the Central Bank announced measures to further ease lending to the economy, which should support the recovery in H2. On top of that, the 13 August deal between the UAE and Israel to normalize relations unlocks potential benefits for trade, investment and tourism in the country.

United Arab Emirates Economic Growth

GDP will contract this year as both the oil and non-oil sectors shrink due to depressed global demand and travel disruptions caused by the pandemic. Moreover, although oil prices have mildly recovered somewhat from April’s low, they still pose a threat to public finances. The uncertain development of the pandemic could continue to weigh on trade and tourism, clouding the outlook. FocusEconomics panelists forecast GDP to shrink 6.0% in 2020, which is down 0.4 percentage points from last month’s estimate, and to grow 3.0% in 2021.

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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