United Arab Emirates Economic Forecast

United Arab Emirates Economic Outlook

November 3, 2020

The economy seemingly started to recover in the third quarter, after the second quarter’s sharp contraction. In September, the PMI moved back into expansionary territory and recorded the best reading in 11 months, signaling an improvement in the business conditions of the non-oil private sector. However, the reading showed that employment levels continued to decrease, albeit at a slower pace than in August. Moreover, oil production hit a near-decade low in Q3, amid constrained output and low global prices, likely weighing on government finances. Additionally, the sharp increase in new Covid-19 cases through September–October poses a threat to the recovery, as restrictions could be tightened again. In other news, on 20 October the UAE and Israel struck a preliminary deal for the oil exporter to send oil directly to Europe via an Israeli pipeline, boding well for the UAE’s oil exports.

United Arab Emirates Economic Growth

The economy will contract this year, as the pandemic and low oil prices weigh on activity. Next year, GDP is expected to recover on the back of stronger aggregate demand as economies reopen globally. Nevertheless, downside risks remain: Uncertainty over the pandemic lingers, and further spikes in infections could dampen oil demand ahead. FocusEconomics panelists forecast GDP to expand 3.0% in 2021, which is unchanged from last month’s forecast, and 3.6% in 2022.

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 %)
Consumption (annual variation in %)-  -  -  -  -  
Investment (annual variation in %)4.38.8-
Industrial Production (annual variation in %)6.03.2-
Unemployment Rate1.
Fiscal Balance (% of GDP)-3.4-2.8-2.02.0-  
Public Debt (% of GDP)18.720.220.019.1-  
Money (annual variation in %)
Inflation Rate (CPI, annual variation in %, eop)
Inflation Rate (CPI, annual variation in %)
Policy Interest Rate (%)
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)
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-
Imports (annual variation in %)-
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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