Economy of United Arab Emirates

The United Arab Emirates (UAE) is a federation of seven different emirates which together comprise the third largest economy in the Middle East behind Saudi Arabia and Iran. Its per capita GDP is second after Qatar. The UAE is an important producer of natural gas and oil, ranking seventh globally in total proven reserves of both. Abu Dhabi possesses the majority of oil and natural gas reserves followed by Dubai, with small amounts in Sharjah and Ras al-Khaimah. The country is also a member of the Organization of Petroleum Exporting Countries (OPEC).

Despite having the most diversified economy in the Middle East, the UAE remains largely dependent upon the hydrocarbons sector for economic growth.

The UAE's strategic plan for the next few years focuses on diversification and creating more opportunities for nationals through improved education and increased private sector employment.

UAE is a major contributor to the growth of the Middle East region. Over the past 42 years, the UAE’s GDP growth rate ballooned 200 times to $360 billion in 2012.

While Dubai’s activities may generate more headlines in the media, Abu Dhabi is the economic powerhouse among the emirates, owing to the fact that it possesses the lion’s share of hydrocarbon reserves. Accounting for 90 per cent of UAE oil and gas production, Abu Dhabi has more than 90,000 million barrels of recoverable crude and the world’s fifth largest deposits of natural gas.

Successful efforts at economic diversification have reduced the portion of GDP based on oil and gas output to 25%. Since the discovery of oil in the UAE more than 30 years ago, the UAE has undergone a profound transformation from an impoverished region of small desert principalities to a modern state with a high standard of living.

UAE’s strong macroeconomic performance has been supported by solid macroeconomic policies (see Figure-4 for selected indicators). Economic growth in the UAE accelerated to 4.4 per cent in inflation-adjusted terms in 2012 from a downwardly revised 3.9% the previous year as activity picked up across all sectors, according to National Bureau of Statistics.

The Economist Intelligence Unit predicts that in the coming 5- year period of 2012-2016 the average fiscal surplus will be 3.9% of GDP, current account surplus - 5.3% of GDP, trade surplus - 15.3% of GDP, and real GDP growth - 5.1% per annum.

One of the most important factors is the role played by good and stable oil prices in general over the last year. Oil prices averaged $112 per barrel last year, up from $109 in 2011. The non-oil sector share on the Gulf country's real GDP was estimated at 67.3% in 2012.

On the strength of its hydrocarbon sector the UAE is one of the world's wealthiest nations, with a gross domestic product (GDP) per capita (at current prices) estimated at $66,113 in 2012. Beyond the hydrocarbon economy—which continues to account for approximately 80 percent of total government revenues—the UAE is becoming one of the world's most important financial centers and a major trading center in the Middle East. Investments in infrastructure and technology, and the development of projects such as the Khalifa Industrial Zone Abu Dhabi (KIZAD) and other economic "free zones," continue to provide the UAE with insurance against oil price declines and global economic stagnation.

Since the bottom of the economic recession in 2009, the UAE solidified its economic portfolio, but it continues to rely on its vast hydrocarbon resources for the majority of its economic activity.

The economy was expected to continue to grow further to reach $395 billion in 2013 (3.6% growth) and as much as $410 billion in 2014.

An IMF report shows that the UAE economy accounted for more than a quarter of the GCC’s GDP of $1.482 trillion in 2012.

The contribution of the construction industry is particularly significant to the UAE economy, especially when massive investments received in this sector from both public and private enterprises are considered.

The political stability experienced by this country, its ability to attract international business and investment, its growing non-oil sector, tax-free environment and attractive salaries have lured builders, architects and consultants to UAE.

High public spending and a steady increase in private sector investment have enabled this country to maintain its position as the second-largest Gulf Arab economy after Saudi Arabia, and among the fastest-growing economies in the world.

Essential Information

Area: 83,600 sq km
Population: 5,473,972 (2012 est.)
Principal Towns: Abu Dhabi, Dubai, Sharjah, Ras al-Khaimah, Umm al-Qaiwain, Ajman, Fujairah.
Languages: Arabic is the official language. English is frequently used in government and business circles.
Gross Domestic Product: $361.9 billion (2012 est.)
GDP per capita: $ 66,113 (2012 est.)
GDP per capita (PPP): $49,000 (2012 est.)
International Reserves: $40.8 billion (2012 est.)
Climate: The United Arab Emirates has an arid, sub-tropical climate with erratic and low rainfall. Rainfall, generally occurring in January and February, varies between 25 and 125 mm year-on-year, this can be higher in the mountains. Midday temperatures range between 38 degrees C and 47 degrees C in the summer months of May to October. Winter temperatures are lower and range from 20 degrees C to 35 degrees C.
Currency: $1 ≈ 3.673 United Arab Emirates Dirham (AED)
 
DEMOGRAPHY
Age Distribution (2012 est.)
0-14 years: 20.6%
15-24 years: 13.8%
25-54 years: 61.5%
55-64 years: 3.1%
65 years and over: 1%
note: 73.9% of the population in the 15-64 age group is non-national.
 
Population Growth: 3.0% (2012 est.)  
Education: 77.9% of the total population age 15 and over can read and write

Visa Requirements:

A visit requires a letter, or telex, of sponsorship to a UAE embassy before a visa can be issued. Bona fide business visitors, Arab and foreign entrepreneurs and experts can now obtain a seven-day transit visa at the airport on entry; this could be revoked.
UK nationals with the right of abode in the UK can stay up to a month without sponsorship due to a visa abolition agreement with the UK.

 Independence Day of the United Arab Emirates, 2 December

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Diplomatic representation of United Arab Emirates in Switzerland