Economic trends
The growth rate of GDP was about 3% in 2010 and 2011, mainly due to soaring oil prices.
The GDP is dominated by the economic power Abu Dhabi (60%), especially by its hydrocarbon production (this emirate hold 9% of the world oil reserves and 5% of the planet’s natural gas reserves) and by its control of nearly all the country’s savings. Dubai contributes to up to 26% of the GDP and constitutes the Emirates’ commercial platform, mostly due to its port and airport infrastructures. The government is trying to develop new sectors, such as tourism, financial services and real estate. In this perspective, the Emirate of Dubai has multiplied the creation of free zones and is becoming a platform for re-export in the region. There is also a number of great cultural projects (museums, especially an annex of the Louvre museum) and sport projects (Formule 1). Moreover, the country has decided to diversify its energy sources by building a fleet of nuclear power plants by 2017 and massively investing in renewable energies, with 22 billion USD for the “Masdar” project.
UAE was nevertheless hit hard by the global economic crisis, which has caused a felt slowdown of the country’s growth. Different factors are at cause: falling oil prices, a contraction of private sector activity, the bursting of the housing bubble in Dubai because of overinvestment, the scarcity of supply of bank credit. Moreover, Dubai was the hardest hit, due to its position of a highly globalized platform and very high borrowing rates. However, the authorities have reacted. The banking sector was consolidated through state guarantees on deposits, introduction of liquidity, recapitalization of banks, and an expansionary fiscal policy (to preserve investments and enhance competitiveness).
Main branches of industry
Agriculture contributes to less than 3% of the GDP. Raw material exploration accounts for nearly 36% of the GDP. United Arab Emirates is the 3rd largest oil producer in the world, with large reserves. Presently, their oil and gas reserves are estimated for 100 years of exploitation.
Manufacturing activities have witneesed an unprecedented growth in the last five years, particularly in sectors such as metal processing, furniture, industrial preparation of food stuffs, aluminum production, cement and construction materials, fertilisers, petrochemical industry, fiberglass and finally real estate.
As for tertiary sector, it contributes around 40% of the GDP and is dominated by international trade, air transport, tourism and financial activities.
International trade
United Arab Emirates are amongst the world’s most dynamic markets in terms of foreign trade. It is amongst the world's 25 primary exporters and 30 primary importers of commodities. Its imports have grown at a rate higher than 20% on average per year. Despite the sharp slowdown in trade in 2009, the UAE is considered a central business hub of the Gulf countries, Iran, South Asia and East Africa.
United Arab Emirates has displayed a large commercial surplus in both 2009 and 2010, due to the raising oil prices.
The main UAE trade partners are Japan, South Korea, Thailand, Singapore, China and Pakistan. The main products exported by the country are hydrocarbons, natural gas, dried fish and dates. Its main suppliers are India, China, the United States, Germany and Japan. The United Arab Emirates mainly imports machinery, transport equipment, chemical products and food stuffs.
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Last updates: February 2012
