Economic Outline

Economic Indicators

The United Arab Emirates has transformed from a modest desert economy into a global hub for trade, finance, tourism, and innovation, underpinned by its vast oil wealth and dynamic diversification efforts. Strategic reforms, free trade zones, and robust global investments continue to drive the nation’s growth and attract international business. Following a rate of 3.6% in 2023, the country’s GDP growth accelerated to 4% in 2024 as the 16 non-oil sectors continued their steady growth pattern over the course of the year. According to the IMF, short-term growth is robust and projected to stay strong at approximately 4% in 2025, despite lower-than-anticipated oil production due to OPEC+ agreements. Non-hydrocarbon sectors are supported by tourism, construction, public spending, and steady expansion in financial services. Capital inflows continue to be strong, driven by social and business-friendly reforms, fueling ongoing demand for real estate and contributing to the rise in house prices across various segments and locations.

The country’s public finances are sound, with moderate consolidated public debt level, strong net external asset position and high GDP per capita. Hydrocarbon revenues are expected to decline due to fluctuating oil prices and lower oil production, but fiscal and external surpluses are forecast to stay strong. The fiscal surplus is projected to decrease slightly to around 4% of GDP in 2025, down from an estimated 5% in the previous year. However, non-hydrocarbon revenues are set to grow steadily, driven by the continued implementation of corporate income tax. Public debt remains stable at approximately 30% of GDP. The current account surplus is expected to be around 7.5% of GDP, while international reserves remain robust, covering over 8.5 months of imports. Banks continue to be well-capitalized and liquid, with asset quality improving further in 2024. Strong domestic activity and sustained demand for credit have bolstered banks' profitability, despite elevated interest rates. Furthermore, the UAE’s Central Bank and sovereign wealth funds own important foreign assets, providing the country with a large liquidity cushion (Abu Dhabi holds the world's fourth-largest sovereign wealth fund) and making the country a net creditor at the global level. After rising to 2.3% in 2023, up from 1.6% the previous year, inflation is expected to remain stable at around 2.0% in 2025, despite higher costs related to housing and utilities (IMF).

The UAE has one of the highest per capita income levels in the world (estimated at USD 82,000 in 2024 at PPP by the IMF) and a highly developed welfare system. It also has one of the lowest rates of unemployment in the Middle East, at 2.2% in 2023 according to the World Bank (while Dubai enjoys the lowest unemployment level in the world, at around 0.5%) and depends heavily on foreign labour (more than 85% of the workforce). A policy of “Emiratisation” has been launched to encourage the employment of the local workforce; nevertheless, the unemployment rate among nationals continues to be considerably high compared to the rate among non-nationals (it varies according to the emirate and is the highest in Abu Dhabi).

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