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UAE reveals record-breaking non-oil trade figures

UAE Reuters/Satish Kumar
The UAE's economic growth is likely to remain 'robust', averaging 4.6 percent from 2022 to 2024
  • Exports, re-exports and imports have all risen, says Ministry of Economy
  • Leading non-oil export sectors include gold, aluminium and plastics
  • Analysts point to business reforms that enhance UAE’s competitiveness 

The UAE has cemented its position as a global trading hub, experts say, after reporting record-breaking non-oil foreign trade figures for 2022.

The top-line figure for the year crossed AED2 trillion ($599 billion) for the first time, reaching AED2.233 trillion. This is a rise of 17 percent on 2021 and an increase of 37.5 percent on pre-pandemic figures released in 2019.

According to Ministry of Economy data, the strong growth was also reflected in exports, which were up 6 percent at AED366 billion.

Re-exports surpassed AED600 billion for the first time, realising a growth of 14 percent on 2021 and achieving a year-end total of AED614.6 billion.

Imports into the UAE also increased by 22 percent to hit AED1.25 trillion.

“The UAE’s non-oil trade has been growing at double-digit rates since 2020, at a time when there are shocks to the global economy in the form of monetary policy directed at stifling an impending recession, and uncertainty around inflation as the war in Ukraine continues,” said Dahlia Sabaayon, senior investment analyst at Al Dhabi Capital.

“The 17 percent growth says much about the strength of the UAE as a global trading hub, and its successful policies to diversify away from oil in the long run.

“It is encouraging to see the share of exports rising over the last seven years, relative to re-exports.”

China, India, Saudi Arabia and the US remain the UAE’s key trading partners, although trading with Turkey grew at the fastest rate, jumping by 40 percent to become the UAE’s sixth largest trading partner.

UAE exports to Turkey increased 109 percent in 2022, to almost AED20.7 billion, while imports from Turkey rose 15 percent to AED40.3 billion, UAE minister for foreign trade Thani Al Zeyoudi told Reuters on Sunday.

The UAE concluded a wide-ranging free trade agreement with India last year with plans to increase bilateral non-oil trade to $100 billion in the next five years.

Comprehensive economic partnership agreements (Cepas) were also signed in 2022 with Israel and Indonesia.

The Ministry of Economy is aiming to finalise Cepas with Turkey, Georgia and Cambodia in the first quarter, as well as targeting deals with Kenya and Ukraine by the middle of the year.

Abdulla Bin Touq, the UAE’s minister of economy, said: “By aligning more closely with our global partners, and by moving quickly to secure supply chains and accelerate investment flows, we have been able to place the UAE at the centre of a new global economic map – which will lead to more records and more milestones in the years ahead.”

Gold, aluminium, plastics and tobacco were the leading non-oil export sectors, with iron and jewellery the fastest-growing product sectors. 

In re-exports, telephones and diamonds were the most important commodities, with the biggest growth coming from aircraft parts and truck parts – underlining the rebound in the global logistics sector.

Scott Livermore, chief economist at Oxford Economics Middle East, said global trade would face a “challenging year” ahead as a number of major regions endure slow growth and potentially recession, while slightly lower commodity prices “will weigh on the value of trade”.

But he remained optimistic around the outlook for the UAE.

“The UAE is set to continue to see robust economic growth, which is likely to continue to draw in imports,” he said.

“Investing, reducing trade barriers and implementing other business-friendly reforms should enhance competitiveness and the UAE’s place on the global market, bearing fruit over the longer term.”

Raghu Mandagolathur, CEO of Marmore Mena Intelligence, a subsidiary of Markaz, said: “The UAE has been a key global trading hub. With the recent numbers indicating the country’s efforts bearing fruits, its planned initiatives are likely to further strengthen its position.”

The UAE’s trade growth of 17 percent compares to the global increase of 12.2 percent announced by the World Trade Organisation.

In its Gulf Economic Update announced in November last year, the World Bank hailed the UAE’s “favourable business environment and world-class infrastructure”.

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