Page 4 - Investor-Navigator

Section 02
UAE
ECONOMY
The UAE is a high-income country, and one of the
richest and fastest growing economies in the world.
It is also the second largest in the Arab world. The
International Monetary Fund (IMF) projected a 3.4%
increase in the UAE’s real Gross Domestic Product
(GDP) in 2018, in comparison to 1.3% in 2017. The
organization has also expected the growth of UAE’s
real oil GDP to reach 3.2% in 2018, while the non-oil
sector growth will reach 3.4% in 2018 in contrast to
3.3% in 2017.
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A rendering of this economic strength in the
regional and international space, the UAE is the most
competitive economy in the Arab region, and ranks
17th globally, among 137 countries according to the
Global Competitiveness Report for 2017 issued by the
World Economic Forum (WEF). 11
The UAE’s competitiveness rating was supported
by strong rankings in infrastructure, goods
and market efficiency, labor market efficiency,
financial market development, business
sophistication and the country’s macroeconomic
environment, among other factors. For instance,
under the ‘Overall Competitiveness Index’, the
UAE earned the first place on the ‘Efficiency
of Government Spending Index’, having been
consistently ranked second for the last three
years .
The solid economy of the UAE and its strong
GDP figures bring the UAE to the level of many
advanced economies.
Although the backbone of the UAE economy is
the production and export of oil and gas - with
resources equivalent to the world’s seventh
largest proven crude oil reserves - aviation,
shipbuilding, manufacture of construction
materials and aluminum, textile industry,
tourism, real estate, trade and many other key
sectors make significant contribution to the
economic development of the country.
With the UAE’s solid and diversified economy, and
a sustainable development future, the country is
favored by investors for its open economy, large
positive surplus, ultra-modern and multi-modal
infrastructure, strategic location and access
to markets, encouraging business climate and,
among others, high standards of living.
UAE Economic Diversification Policy
The UAE has a clear and comprehensive vision With its economic diversification policy – which
is reducing dependence on oil revenues – the UAE
to diversify its economy and achieve an optimal
balance between various economic sectors to ensure gears to be more flexible in adopting new economic
sustainability and create new business opportunities.
models, and seeks to be ever proactive in capitalizing
As much as enhancing the UAE’s competitiveness in on regional and global economic partnerships to
the global economic front, the move to creating a ensure sustained prosperity. The policy also focuses
solid foundation of the post-oil era – by diversifying on investing in non-oil sectors such as infrastructure,
the economy and strengthening trade – will ensure a technology, aviation, tourism, healthcare, and
sustainable economy for generations to come . education, among others.
The UAE had already reaped the rewards of this
The UAE aims to increase the share of its non-oil real strategy: even when oil prices began falling in 2014, the
GDP to 80%, by 2021. As a result, government spending non-oil GDP growth of the UAE in the same year was
and investment opportunities in non-oil sector will at an impressive 8.1%, surpassing as well the country’s
continue to accelerate. overall GDP growth. In 2016, non-oil sectors account
for more than 80% of the total UAE GDP.
Oil and Non-Oil Sectors Contribution to UAE Real GDP, in Percentage, 2016
Non-oil sectors
Oil sector
UAE Real GDP by Sector, in Percentage, 2016
Mining and quarrying
(includes crude oil and natural gas)
Wholesale, Retail Trade and
Repairing Services
Construction
Other Sectors Manufacturing Industries
Information and Transportation, Storage
communication
Electricity, Gas and Water Financial and Insurance
activities
Public administration and defence;
compulsory social security Real Estate activities