The economy of the United Arab Emirates is the second largest in the Arab world (after Saudi Arabia), with a gross domestic product (GDP) of $570 billion in 2014.
The United Arab Emirates has been successfully diversifying its economy away from the dependance on oil with Dubai leading the way.
Gross Domestic Product
A recent UAE Outlook Report for 2016 by Middle East business intelligence service MEED reports that a recovery in oil prices combined with growing public and private sector activity boosted by Dubai’s preparations for the Expo 2020 will see real GDP growth rise to between 4-5 per cent a year from 2017- 2020.
Strong Financial Reserves
The UAE maintains strong financial reserves and has a durable banking sector, which makes it safe for investment. The International Monetary Fund forecasts that the gross official reserves of the UAE would grow from USD 76.8 billion in 2015 to USD 118.4 billion in 2020. The current account surplus would grow from USD 17.6 billion in 2015 to USD 33.4 billion by 2020.
Projected Reserves by 2020
The government policy of economic diversification has led into impressive development in key sectors such as tourism, air transport, trade, financial services, manufacturing and alternative energy.
The UAE has made progress towards ending its economic dependence on hydrocarbons. Oil industries accounted for around 30 per cent of GDP in 2014, down from 79 per cent in 1980.
In 2015, the UAE government injected AED300 billion to foster a knowledge economy, driven by innovation to prepare the UAE for a world after oil.
The UAE enjoys a strategic location between Asia, Europe and Africa. Thousands of Chinese businesses use Dubai as a hub for trading in Africa. Indian traders use the emirate to access the world. Latin Americans see the country as a launching platform into South Asia. Western nationals use Dubai as a hub for the Middle East.