The UAE’s economy is heavily reliant on commodities, with petroleum and natural gas, especially in Abu Dhabi, accounting for a considerable share of GDP. However, a closer look at the UAE GDP breakdown for commodities reveals some interesting insights about the promising future of the country’s economy. Apart from the oil and gas sector, other commodities also play a significant role in the UAE’s GDP, underscoring the need for more diversification.
Although there has been some economic diversification of UAE’s commodities in recent years, particularly in Dubai, Abu Dhabi, and other UAE emirates have remained relatively conservative in their approach to diversification. It is worth noting that Dubai has far smaller oil reserves than its counterparts. In this post, we will provide you with a brief overview of the UAE’s economy and its growing GDP in various sectors.
An Overview of UAE’s Booming Economy
UAE is one of the countries with the highest GDP in the world. Many global business indexes have recognized the advantages that the UAE brings to international business. In 2019, AT Kearney ranked the UAE as one of the top 25 best destinations in the world to deliver commercial services to global companies. The UAE is also ranked in the top 30 on the World Economic Forum’s “most-networked countries”, ahead of all other Arab nations, plus countries like Italy, Turkey, and India.
The UAE GDP is mainly oil-based and its economy is the second-largest in the GCC region following Saudi Arabia. According to UAE Economy, as a mainstay of the economy, oil exports now account for nearly 30 percent of the total UAE’s Gross Domestic Product. This reveals the rich natural resources in the UAE, which has 10 percent of the overall world supply of oil reserves and the world’s fifth-largest natural gas reserves.
The non-oil sector of the UAE’s economy is also quite remarkable and includes tourism, finance, construction, and other industries. Tourism is one of the superior non-oil sources of revenue in the UAE. An immense construction boom, a magnifying manufacturing base, and a thriving services sector are facilitating the UAE to diversify its economy. Nationwide, there is now $350 billion worth of active construction projects.
The UAE’s GDP per capita is also one of the highest in the world. In 2014, the UAE’s GDP per capita was $68,250, making it the 4th highest in the world. The UAE’s GDP per capita has been growing steadily over the past few years and is expected to grow to $832 billion by 2022.
Diversification Plans to Grow the UAE GDP
The UAE’s government is trying its utmost to diversify the country’s economy and reduce its dependence on oil as well as transform its economy from a conservative, labor-intensive economy to one based on technology, knowledge, and skilled labor. The government has set up special economic free zones in the UAE, such as the Dubai International Financial Centre, which is designed to attract foreign investment and promote the growth of the non-oil sector of the economy.
The federal and individual Emirate governments have recently invested heavily in sectors such as tourism, aluminum production, renewable energy, aviation, re-export commerce, telecom, and sophisticated technologies.
Tourism has played a substantial part in the success of the UAE GDP diversification. The UAE’s world-class airlines, including Etihad and Emirates, as well as the constant enhancement of aviation infrastructure, have played a significant role in the expansion of the tourism industry and are key contributors to the economy. By hosting numerous international events like the World Expo in 2021, the UAE attracted a large number of tourists and industry leaders from all over the world.
The UAE is currently a member of the GCC (Gulf Cooperation Council) and the Arab League. It is also a member of the World Trade Organization (WTO) and the Organization of the Petroleum Exporting Countries (OPEC), all contributing to the explosive economic growth of the country in the MENA region.
UAE: A Strategic Hub for Re-Exports of Commodities
The United Arab Emirates has a highly diversified economy, with a wide range of commodity exports. The country is a major producer of crude oil and natural gas and is also a leading exporter of aluminum and petrochemicals. It is also a major hub for re-exports, and its various ports handle a large volume of trade every single minute.
UAE Stats for UAE GDP Breakdown in 2021
- GDP: $832 billion
- GDP per capita: $68,250
- Oil and gas sector: $468 billion
- Non-oil sector: $364 billion
- Tourism: $20.6 billion
- Finance: $16.3 billion
- Construction: $13.1 billion
The Final Word
The UAE’s economy is highly reliant on commodity exports, and the country’s GDP is heavily skewed towards the oil and gas sector. However, the non-oil sector is also growing rapidly and now accounts for a significant share of Gross Domestic Product. The country’s service sector is particularly robust and fast-growing and is a major contributor to UAE GDP.
The UAE’s GDP is expected to continue to grow strongly in the upcoming years, as the country benefits from high oil prices and strong demand for its exports through its various. The non-oil sector is promisingly expected to continue to expand, providing a more balanced growth in the near future and making UAE an attractive investment destination for foreign investors.
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What makes the biggest share of UAE GDP?
The oil and gas sector makes up the largest share of UAE GDP. In 2021, the oil and gas sector accounted for $468 billion of the UAE’s $832 billion GDP. The non-oil sector is also quite diversified and includes tourism, finance, construction and other industries.
How does UAE plan to diversify its economy?
The UAE government is attempting to minimize the country’s reliance on oil by establishing special free zones, such as SEZs (Special Economic Zones), FTZs (Free Trade Zones), EPZs (Export Processing Zones), BZs (Business Zones), and IZs (Industrial Zones) to attract international investment and encourage the economy’s non-oil sector’s growth.
How does DFreight help grow UAE GDP?
As a digital freight forwarding platform, DFreight helps businesses export and import a wide variety of commodities to/from the UAE by providing an easy-to-use, efficient, and cost-effective digital solution. It links businesses with a global network of logistics providers and customs brokers to assist them to ship their products from UAE to any destination in the world.