United Arab Emirates

United Arab Emirates

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The United Arab Emirates (UAE) is a federation of seven emirates, located in the southeast region of the Arabian Peninsula. The country’s population is estimated at 9.3 million [1], with the majority of the population living in urban areas at a rate of 86.5%. [2] According to the latest data published by the Federal Competitiveness and Statistics Authority (FCSA), nationals represent only 11.4% of the total population due to the significantly high immigration rate in the country. Given the country’s reliance on foreign workers, the working age group of 15-64 makes up the highest share of the total population at 85%. [1]


The economy of the UAE is the third largest in the Arab region, succeeding that of Saudi Arabia and Egypt with Gross Domestic Product (GDP) (Purchasing Power Parity, constant 2011 prices) reaching Int$ 632.6 billion and Gross National Income (GNI) per capita reaching Int$ 74,410 in 2017. [3] The country relies heavily on its large oil and natural gas resources to support its economy and is considered a major oil and natural gas producer and exporter.


Volatility in oil prices stressed the need for UAE to continue its reform in diversifying its economy and contain its dependence on oil. The sharp fall in oil prices in 2014 has led to a fiscal deficit of 3.4% of GDP in 2015. In 2018, the fiscal balance registered a surplus of 0.6% of GDP and is projected to increase to 1.3% in 2019. [4]


After recording a growth rate of 0.8% in 2017 down from 3% in 2016, real GDP growth rate reached 2.9% in 2018 and is projected to strengthen to 3.7% in 2019 with oil and government spending set to rise. Due to the introduction of a 5 percent Value Added Tax (VAT) on January 1st, 2018, inflation increased from 2% in 2017 to 3.5% in 2018. [4] In this context, the introduction of VAT has been a historic milestone and is expected to significantly strengthen and diversify government revenues in the coming years.


UAE depends heavily on migrant labor however nationals are increasingly encouraged to explore the employment opportunities offered by the private sector. According to the latest national published data, the total unemployment rate is 2.5% below the world rate of 5.5%. However, the economic participation of women in the labor market remains low at 52.6% compared to 92.8% for men. [1]


Given fiscal barriers and rising investment needs for Expo 2020, the government has been investing in providing stimulus to the economy, which is compatible with the goals of Vision 2021 aiming at diversifying the economy and raising productivity. The authorities announced reforms aiming at improving growth, promoting innovation and increasing the role of the private sector. Reform priorities include liberalizing foreign investment, introducing long-term visas for professionals, and easing licensing requirements and business fees. Other plans include promoting competition, privatizing nonstrategic government-related enterprises (GREs), and improving the ecosystem for SME development and access to finance. [5]

 

 

This overview was last updated in January 2019. Priority is given to the latest available official data published by national statistical offices and/or public institutions.


 

Sources:

[1] Federal Competitiveness and Statistics Authority. 2018. [ONLINE] Available at: http://fcsa.gov.ae/en-us [Accessed 3 January 2019].
[2] Population Division of the Department of Economic and Social Affairs of the United Nations Secretariat . 2018. World Population Prospects. [ONLINE] Available at: https://population.un.org/wpp/ [Accessed 3 January 2019].
[3] The World Bank. 2018. World Development Indicators. [ONLINE] Available at: https://databank.worldbank.org/data/reports.aspx?source=wdi-database-archives-(beta)​ [Accessed 3 January 2019].
[4] International Monetary Fund. 2018. World Economic Outlook. [ONLINE] Available at: https://www.imf.org/external/pubs/ft/weo/2018/02/weodata/index.aspx [Accessed 3 January 2019].
[5] International Monetary Fund. 2018. IMF staff completes 2018 article IV mission to the United Arab Emirates. [ONLINE] Available at: https://www.imf.org/en/News/Articles/2018/10/01/pr18369-imf-staff-completes-2018-article-iv-mission-to-the-united-arab-emirates [Accessed 3 January 2019]. 

 

 



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Data Highlighted

  • The country relies heavily on its large oil and natural gas resources to support its economy and is considered a major oil producer and exporter. In 2016, UAE produced 1.1 billion barrels of crude oil up from 693.6 million barrels in 2002. In addition, the UAE exported 2.41 million barrel per day of crude oil in 2016.

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