The Flourishing Economy of UAE
UAE is one of the fastest growing economies in the world and the second largest in the Arab world. GDP of UAE economy which stood at $382.58 Billion in 2017 is projected to trend around $425.00 Billion by the year 2020. The economy of UAE has grown by nearly 231 times, since its independence in 1971.
Numerous factors contribute to the prosperous economy of UAE; the major ones being the strategic location of the country, robust financial reserves, large sovereign wealth fund, favorable investor home economies, consistent government spending, liberal policy of economic diversification, free zones and increased foreign direct investment.
UAE’s evolution from an impoverished desert village to a sustainable city with excellent standards of living, since the discovery of oil decades before, is highly inspiring. Prior to this, the region’s economy was driven mainly by nomadic farming, date palm cultivation, fishing, pearling and seafaring.
Even though there was a slump in the oil export rates over the last few years, petroleum and natural gas exports still play a crucial role in the economy, especially in Abu Dhabi.
Since the discovery of oil, the economy has been majorly influenced by sectors that include extraction of crude oil and natural gas, wholesale and retail trade, repair services, real estate, business services, construction and manufacturing.
The non-oil sector in UAE has been witnessing accelerating growth and hence declining oil prices might not affect the economy adversely. Economic activity in the UAE non-oil sector is expected to improve further in 2019, according to the UAE’s central bank. The fiscal stimulus packages by Abu Dhabi and Dubai play a significant role in enhancing the economic activities.
A $13.6 billion economic stimulus package and several other economic initiatives were recently announced by the Abu Dhabi government, to ease the cost of doing business in UAE. The Dubai government has also come up with numerous measures to cut costs of doing business in industries such as aviation, real estate, and education.
The initiatives are expected to strengthen the competitiveness of the current economic sectors as well as introduce new sectors, which will lead to a giant leap in the UAE’s economy.
It “will help the economy through reducing the cost of doing business for the private sector, attracting and retaining talent, and facilitating and attracting FDI”.