The United Arab Emirates (UAE) is a very prosperous country, chiefly because of its modest population base and heavy oil resources. The large budget surpluses attained have enabled United Arab Emirates to accumulate a sizeable current account balance, held chiefly by the governments of the individual Emirates and partly by other private establishments.
Experts mentioned through different studies that UAE has attained impressive progresses in various economic and social development indicators during the past decades and presently it has attained an income level comparable to that of the industrialized states and is the world’s 7th largest oil producer and the production of crude oil.
|UAE ECONOMIC REVIEW (annual percent change unless indicated otherwise)|
|Details||2014||2015||2016 e||2017 f||2018f||2019 f|
|Real GDP growth, at constant market prices||3.1||3.8||3.0||1.4||3.1||3.3|
|Gross Fixed Capital Investment||8.3||10.6||3.0||2.8||7.9||10.3|
|Exports, Goods and Services||0.2||3.4||1.3||2.5||4.0||4.0|
|Imports, Goods and Services||12.3||-1.2||1.7||3.0||3.2||3.2|
|Real GDP growth, at constant factor prices||3.1||3.8||3.0||1.4||3.1||3.3|
|Inflation (Consumer Price Index)||2.4||4.1||1.6||2.2||2.9||2.5|
|Current Account Balance (% of GDP)||13.3||4.7||2.4||2.6||2.7||2.9|
|Fiscal Balance (% of GDP)||1.9||-3.4||-4.3||-3.2||-1.9||-1.0|
Further integration within Gulf Cooperation Council (GCC) and continued work towards enlarging its services and other non-fuel sectors will not only serve economic stability, but should also strengthen the UAE’s situation as a financial and international trade hub.
International economic managers have mentioned in the present economic update that the UAE’s economic growth, which was registered a persistent slowdown from 2015, is predicted to grow 3.4 percent in 2018, up from 1.7 percent in 2017. They have also revealed that the UAE’s economy is more diversified and developed than most others in Menap (Middle East, North Africa, Afghanistan and Pakistan) region.
It is also mentioned in the report that the non-oil sector both in Dubai and Abu Dhabi is almost rising at the same speed, almost 3 percent. The recovery in Abu Dhabi, which holds about 6 percent of the world’s proven oil reserves, will be assisted by a recovery in oil output in 2018 after the OPEC-led accord to decline production caused exports to fall in 2017.
Furthermore, there are also reports that Abu Dhabi, the largest and wealthiest of the seven Emirates that make up the UAE, consolidated its firms and state-owned entities as oil revenue dropped.
The International Monetary Fund (IMF) predicts oil rates to average $53 in the upcoming years. Saudi Arabia and Russia have explained they support enlarging production cuts through 2018 to shore up prices. The IMF also expects Abu Dhabi’s non-oil economy to increase 3.3 percent in 2018 from 3.2 percent in 2017.
Dubai’s GDP growth for 2018 is predicted at 3.5 percent as against to 2.9 percent and 3.3 percent in 2016, and 2017 respectively.
Abu Dhabi’s GDP is also predicted to rise 3.2 percent in 2018 as against to a meager 0.3 percent in this year and 2.8 percent in 2016.
While Saudi Arabia’s real GDP growth is predicted to be flat at 0.1 percent, down from 1.7 percent previous year. In 2018 Saudi’s GDP is expected to see a marginal improvement largely driven by non-oil sector growth. Saudi Arabia’s real GDP growth is predicted to be close to zero (0.1 percent) in this year as oil GDP falls in line with Saudi Arabia’s commitments under the OPEC contract. However, the economic managers expect growth to strengthen over the medium-term as structural reforms are implemented. Non-oil growth in Saudi is predicted to pick up to 1.7 percent in this year with further uptick in 2018 with a predicted overall GDP growth of 1.1 percent.
International statistics identified that the overall regional budget deficits have fallen. Statistics for the first half of the year explains that Oman and Qatar deficits are down by about a third compared with the first part of 2016, and is less than anticipated. Although the Saudi statistics explains further improvement, cutting the deficit in the first half of the year by greater than 50 percent, the government of Saudi pledging to repay many public sector advantages and bonuses could raise expenditure in the second half, leading to larger deficits than anticipated for the year as a whole.