The United Arab Emirates (UAE) applies innovative approaches to promote economic growth, GDP and diversification while retaining its position as one of the most developed and competitive economies in the world.
The Central Bank of the United Arab Emirates (CBUAE) forecasts that the country’s real GDP would increase by 3.9 percent in 2024 and 6.2 percent in 2025. Additionally, the central bank projects that the country will continue to perform well in terms of international trade in 2024 and 2025.
The country’s non-hydrocarbon GDP growth is predicted to remain strong at 5.4 percent in 2024 and 5.3 percent in 2025, according to the CBUAE’s June 2024 Economic Quarterly Review. The hydrocarbon sector is expected to grow by 0.3 percent in 2024 and then by 8.4 percent in 2025.
Current UAE GDP statistics
Here is the table that shows the UAE’s current GDP as of April 2024, according to the IMF.
Real GDP growth | 3.5 percent |
GDP | $527.8 billion |
GDP per capita | $53.92 thousand |
UAE GDP reaches AED430 billion in Q1 2024
The Federal Competitiveness and Statistics Centre (FCSC) has released preliminary estimates of the UAE’s GDP growth in Q1 2024. According to Minister of Economy Abdulla bin Touq Al Marri, these estimates highlight the resilience and vitality of the national economy and demonstrate its ability to maintain sustainable growth. He emphasized that, in Q12024, the nation’s real GDP reached AED430 billion, demonstrating an astounding rise of 3.4 percent when compared to the same period in 2023, while the GDP from non-oil sources increased by 4 percent.
Here are some key points:
Financial and insurance
According to FCSC data, the UAE’s GDP has grown by 7.9 percent, making the financial and insurance industry the main non-oil economic sector contributing to this increase. This recovery is attributable to the notable rise in local credit extended to the private sector, which spurred a 6 percent growth and helped the non-oil economy recover.
Transportation and storage
The operations related to transportation and storage came in second, growing by 7.3 percent. The number of passengers using the nation’s airports increased significantly in the first three months of this year, totalling 36.5 million, a growth rate of 14.7 percent over the same time previous year. This rise was the primary driver of this growth.
Ports
Over this period, the ports in the United Arab Emirates have performed very well. Dubai’s international ports have handled 3.7 percent more containers annually than any other port, while Abu Dhabi’s ports have handled 36 percent more cargo.
Construction and building
The building and construction sector grew at a pace of 6.2 percent, in line with the many development initiatives the UAE government launched in the first part of 2024. When compared to Q1 2023, they witnessed a significant increase in the government’s public capital expenditures, which came to AED4.8 billion. It makes up 11.8 percent of the total, with real estate activity coming in second with 7.1 percent.
Restaurants and hotels
With a 4.6 percent gain in the first quarter of 2024 compared to the same period in 2023, the restaurant and hotel industry looks impressive. Additionally, the UAE rose to prominence in the field of travel, drawing a sizable number of visitors from all over the globe.
Tourism
More specifically, 5.18 million foreign visitors arrived in Dubai, an exceptional number that increased by 11 percent over the same period in 2023. Abu Dhabi continued to exhibit remarkable results in important tourist metrics, such as average hotel occupancy rates and revenue per available room.
Trade
With a 16.1 percent share, trade activities contributed the most to the GDP that wasn’t related to oil. Activities related to manufacturing rank second at 14.6 percent, followed by finance and insurance activities at 13.4 percent.
UAE’s international trade
UAE’s overall non-oil international trade in products was AED2,426 billion in 2023. This is up 11.9 percent from 2022. The UAE’s non-oil exports rose by 15 percent to AED423.6 billion during the reporting period when compared to the same time last year. Data indicates that Turkey emerged as the UAE’s top non-oil export partner, accounting for 10.9 percent of exports; India came in second with 10.5 percent and Saudi Arabia with 9 percent. The most exported non-oil goods were gold, accounting for 42.1 percent of total non-oil export, followed by petroleum oils and oils obtained from bituminous minerals (5.6 percent) and aluminum (5.4 percent). In 2023, re-exports increased by 6.2 percent to reach AED618.9 billion. Saudi Arabia continued to be the biggest destination for UAE re-exports, accounting for 11 percent of the total, followed by Iraq (10.3 percent) and India (7.2 percent).
Diversification of GDP [1971 (L) and 2019 (R)]
Source: UAE Ministry of Economy
Re-exports were led by diamonds and telecom equipment, which made up 11.5 percent and 18 percent of the total, respectively. With a notable 13.8 percent increase from 2022 to 2023, imports reached AED1,388.3 billion. The rise was ascribed to the non-hydrocarbon sector’s strong expansion and the currency’s little appreciation. With 19 percent of all imports coming from China, the country continued to be the largest trade partner. The United States (6.9 percent) and India (7.8 percent) came in second and third, respectively. Gold accounted for the largest percentage of imported goods at 20.4 percent. It was followed by automobiles (6.5 percent), diamonds (4.8 percent), and telecommunications equipment (9.7 percent).
Exchange rate
The nominal effective exchange rate (NEER) factors in the bilateral exchange rates of the national currency against a basket of UAE’s trading partners. It appreciated by 4.2 percent Y-o-Y in April 2024, compared to 2.4 percent in the previous month, due to the appreciation of the USD. In the same way, the real effective exchange rate (REER), which modifies the NEER for variations in inflation between the United Arab Emirates and its trade partners, saw a 3.1 percent increase from the previous year, or 1.4 percent month-over-month gain. The higher nominal currency rate and the UAE’s lower inflation rate in comparison to its trade partners are the main causes of this appreciation.
Share of sectors in UAE’s GDP
The UAE’s GDP is $527.8 billion as of April 2024. In the United Arab Emirates, the service industry comprises several sectors. These include Information and Communication Technology, Travel and Tourism. Also, Education, Financial Services, Professional Services. And, Construction, Retail, and Wholesale. The UAE’s services sector now accounts for 58.21 percent of GDP. This is a considerable rise from 46.71 percent over the previous 10 years.
About 64 percent of workers in the UAE were employed in service-related fields, making the industry a significant employer. Within the service industry, foreign commerce, air travel, finance and tourism are important subsectors. The UAE’s service sector greatly benefits from tourism. And, it also has a major influence on the GDP of the nation. The country is well known for its exceptional tourism attractions. And, it is drawing a large number of international visitors.
The service sector is a major employer in the UAE. It has approximately 64 percent of the workforce engaged in service-related occupations as of 2020. Key sub-sectors within the service industry include international trade, air transport, financial activities, and tourism. Tourism is a particularly significant contributor to the UAE’s service industry and has a substantial impact on the country’s GDP. The country is renowned for its world-class tourism offerings, attracting a large number of international visitors.
The UAE’s economy greatly benefits from the service sector. It spurs growth and offers a wide range of job possibilities. The industry’s growth, rising GDP share, and focus on sectors like tourism underscore its significance as an essential component of the UAE’s economic environment.
UAE GDP forecast and future outlook
The gross domestic product (GDP) in current prices in the United Arab Emirates was forecast to continuously increase between 2024 and 2029 by in total $157.4 billion (+29.82 percent). After the sixth consecutive increasing year, the GDP is estimated to reach $685.15 billion and therefore a new peak in 2029.
UAE’s total non-oil foreign goods trade in 2023 reached an all-time high exceeding a record AED2.4 trillion, supported by the materialization of bilateral comprehensive economic partnership agreements. This strong foreign trade performance is expected to continue in 2024 and 2025, sustaining UAE’s real GDP growth that is projected to reach 3.9 percent in 2024 and further accelerate to 6.2 percent in 2025. UAE’s real GDP growth also depends on the OPEC+ decision on the quotas, which is subject to the uncertain performance of the global economy. The non-hydrocarbon GDP remains very robust, with growth forecasted to remain around 5.4 percent in 2024 and 2025.
Frequently Asked Questions (FAQs)
What is the current GDP of the UAE?
As of April 2024, the UAE’s GDP stands at $527.8 billion.
What sectors contribute most to the UAE’s GDP?
There are many sectors that include finance and insurance, tourism, hospitality, ports, construction, etc that contributes to the UAE’s GDP, in addition to the oil industry.
How does the oil sector impact UAE’s GDP?
Among the top 10 oil producing countries in the world is UAE. Abu Dhabi is home to about 96 percent of the nation’s approximately 100 billion barrels of confirmed oil reserves, making it the sixth largest oil resource in the world. Around 3.2 million barrels of petroleum and liquids are produced daily on average in the United Arab Emirates. Therefore, oil sector is the major growth driver of UAE’s GDP.
What are the projections for UAE’s GDP growth?
The UAE’s GDP is estimated to reach $685.15 billion in 2029.
What factors are affecting the UAE GDP?
The World Bank projects that the UAE’s economy would grow faster as oil output and prices rise, with the country’s robust non-oil sector performance playing a significant role in this development.
For more economy news, click here.
