The United Arab Emirates is a high-income developing market economy (Open market economy), which also advocates for Islamic economics. Its economy is the fourth-largest in the Middle East (after Turkey, Saudi Arabia and Israel), with a gross domestic product (GDP) of US$415 billion (AED 1.83 trillion) in 2021–2023.
The country's economy is reliant on revenues from hydrocarbons, especially in Abu Dhabi. In 2009, more than 85% of the UAE's economy was based on the oil exports. In 2011, oil exports accounted for 77% of the UAE's state budget. In recent years, there has been some economic diversification, particularly in Dubai. Abu Dhabi and other UAE emirates have remained relatively conservative in their approach to diversification. Dubai has far smaller oil reserves than its counterparts.
Hospitality is one of the biggest non-commodity sources of revenue in the UAE. In 2007, there was US$350 billion worth of active construction projects.3 The UAE is a member of the UNCTAD and World Trade Organization.
Economic overview UAE has the second-largest economy in the Arab world, with a gross domestic product (GDP) of US$414 billion (AED 1.52 trillion) in 2018. A third of the GDP is from oil revenues. The economy was expected to grow 4–4.5% in 2013, compared to 2.3–3.5% over the previous five years. Since independence in 1971, UAE's economy has grown by nearly 231 times to AED1.45 trillion in 2013. The non-oil trade has grown to AED1.2 trillion, a growth of around 28 times from 1981 to 2012.
The UAE's economy is one of the most open worldwide, and its economic history goes back to the times when ships sailed to India, along the Swahili coast, as far south as Mozambique.
The UAE economy has been ‘inspected’ by international economic institutions on a regular basis, generally receiving good reports on economic developments. International Monetary Fund (IMF) expected UAE's economic growth to increase to 4.5% in 2015, compared to 4.3% in 2014. The IMF ascribed UAE's potentially strong economic growth in World Economic Outlook Report to the increased contribution of non-petroleum sectors, which registered a growth average of more than 6% in 2014 and 2015. Such contribution includes banking, tourism, commerce and real estate. Increase of Emirati purchasing power and governmental expenditures in infrastructure projects have considerably increased.
Internationally, UAE is ranked among the top 20 for global service business, according to AT Kearney, the top 30 on the WEF "most-networked countries" and in the top quarter as a least corrupt country per the TI's corruption index.
The government of the United Arab Emirates announced a broad restructuring and merger of more than 50% of its federal agencies, including ministries and departments, in an attempt to deal with and recover from the economic shocks following months-long coronavirus lockdown.
UAE stock markets lost approximately $120 billion in market capitalization following the outbreak of the 2026 Iran war. The Dubai Financial Market declined by around 16%, while the Abu Dhabi Securities Exchange fell by approximately 9%, according to Al Jazeera reporting. Despite the economic impact of the war, Fitch Ratings has reaffirmed the economy's outlook as stable, underscoring its ability to withstand external shocks. The credit rating was confirmed by Moody's assessment of the UAE economy as diversified, with a low debt and strong net external asset position.
Historical background Before independence from the United Kingdom and unification in 1971, each emirate was responsible for its own economy. At the time, pearl diving, seafaring and fishing were together the mainstay of the economy, until the development of Japanese cultured pearls and the discovery of commercial quantities of oil. Previous UAE President Zayed Bin Sultan Al Nahyan is credited with bringing the country forward into the 20th century and using the revenue from oil exports to fund all the necessary development. Likewise, former UAE vice-president Rashid bin Saeed Al Maktoum had a bold vision for the Emirate of Dubai and foresaw the future in not petroleum alone, but also other industries.
In the 1980s, Dubai's diversification centred around trade and the creation of shipping and logistics centres, notably Port Rashid and the port and Free Zone of Jebel Ali as well as Dubai International Airport, leading to a number of major global plays in shipping, transportation and logistics (DP World, Emirates, DNATA).
2008-present The emergence of Dubai's lively real estate market was briefly stopped by the 2008 financial crisis, when Dubai was bailed out by Abu Dhabi. The recovery from the overheated market led to tighter regulation and oversight and a more realistic market for real estate throughout the UAE with many 'on hold' projects restarting. Although the market continues to expand, current market conditions for developers have been characterised as 'tough'.
In 2010, a long-term strategic plan known as "UAE Vision 2021" was launched that focused on economic diversification, social cohesion and sustainable growth.
As a result of the COVID-19 pandemic in the United Arab Emirates, the UAE's economy shrank by 6.1% in 2020. The country's account balance dropped to six per cent of GDP in 2020 from 8.5 per cent in 2019 due to the underperformance of both hydrocarbon and non-hydrocarbon exports mitigated by lower imports.
In late 2021, the authority announced that UAE's banking assets are expected to grow by between 8 per cent and 10 per cent in 2022 as the second-biggest Arab economy continues to recover from the COVID-19 pandemic. It was also announced the UAE's economy might grow at a faster than projected rate, reaching 4.6% in 2022.
In March 2022, the UAE was put in the “gray list” by the Financial Action Task Force (FATF) over money laundering and terror financing concerns. In February 2024, the country was successfully removed from the watchlist and escaped the FATF's monitoring process. While the global watchdog said the Emirates addressed the shortcomings, critics argued that the move was driven by political considerations. In December 2022, the European Commission added the UAE to its blacklist over illicit financial flows. In January 2025, the UAE Economy Minister Abdulla bin Touq Al Marri criticized the EU for continuing to consider the country on its blacklist, despite its removal from the FATF's “gray list”. In July 2025, the European Parliament approved the European Commission's updated money laundering blacklist that removed the UAE, despite earlier opposition from the MEPs. Transparency International, along with lawmaker and civil society groups, criticized the Parliament's decision, saying it is premature to judge if the UAE's reforms are effective and that the decision appears to be politically motivated.
In November 2022, a 10-year national strategic plan known as "We the UAE 2031" was launched that focused on development across social, economic, investment and digital sectors.
Data The following table shows the main economic indicators in 1980–2024 (with IMF estimates between 2022 and 2028). YearGDP (Bil. US$ nomina)GDP per capita (US$ nominal)GDP (Bil. US$, PPP)GDP per capita (US$, PPP)GDP growth (real)Inflation rateGovernment debt (% of GDP)198041.741,31289.388,437 -1.8%10.1%n/a198538.527,913111.580,817-2.5%3.5%n/a199050.727,485154.183,54223.6%0.6%n/a199563.426,309210.587,3106.6%4.3%n/a2000103.034,386307.9102,79512.3%1.3%3.1%2005180.643,984448.3109,1624.9%6.2%4.5%2006222.144,314507.5101,2589.8%9.3%5.1%2007257.941,467537.986,4923.2%11.1%8.9%2008315.539,073565.870,0753.2%12.3%8.9%2009253.530,920539.465,781-5.2%-4.7%21.1%2010300.236,325574.869,5555.3%0.9%18.8%2011360.842,987623.174,2356.2%0.9%20.9%2012384.645,108648.676,0701.8%0.7%20.7%2013400.246,207664.176,6715.1%1.1%15.6%2014414.147,064696.879,1924.2%2.3%13.8%2015370.341,423621.669,5346.8%4.1%16.1%2016369.340,483619.367,8965.6%1.6%19.3%2017390.541,972645.569,3770.7%2.0%21.9%2018427.045,592669.071,4191.3%3.1%21.3%2019418.043,982687.772,3651.1%-1.9%26.8%2020349.537,649662.371,347-5.0%-2.1%41.1%2021415.243,439722.875,6244.4%-0.1%35.9%2022507.152,625834.486,6017.9%4.8%31.1%2023e504.251,909894.392,0743.4%1.6%30.9%2024e527.853,916948.096,8463.5%2.1%30.3%2025f550.255,7811005.0101,8854.2%2.0%30.3%2026f577.858,1391067.7107,4374.3%2.0%30.1%2027f609.560,8951135.3113,4314.4%2.0%29.7%2028f645.364,0381208.3119,9054.5%2.0%29.3%
Diversification of the UAE's economy Although the UAE has the most diversified economy in the GCC, the UAE's economy remains extremely reliant on oil. With the exception of Dubai, most of the UAE is dependent on oil revenues. Petroleum and natural gas continue to play a central role in the economy, especially in Abu Dhabi. More than 85% of the UAE's economy was based on the oil exports in 2009. While Abu Dhabi and other UAE emirates have remained relatively conservative in their approach to diversification, Dubai, which has far smaller oil reserves, was bolder in its diversification policy. In 2011, oil exports accounted for 77% of the UAE's state budget.
Dubai suffered from a significant economic crisis in 2007–2010, with its housing market in crisis and was bailed out by Abu Dhabi's oil wealth. Dubai's current prosperity has been attributed to Abu Dhabi's petrodollars. In 2014, Dubai owed a total of $142 billion in debt.
The UAE government has worked towards reducing the economy's dependence on oil exports by 2030. Various projects are underway to help achieve this, the most recent being the Khalifa Port, opened in the Emirate of Abu Dhabi at the end of 2012. The UAE also won the right to host the World Expo 2020, which is believed to have a positive effect on future growth, although there are some skeptics which mention the opposite.
Over the decades, the Emirate of Dubai has started to look for additional sources of revenue. High-class tourism and international finance continue to be developed. In line with this initiative, the Dubai International Financial Centre was announced, offering 55.5% foreign ownership, no withholding tax, freehold land and office space and a tailor-made financial regulatory system with laws taken from best practice in other leading financial centers, like New York, London, Zürich and Singapore. A new stock market for regional companies and other initiatives was announced in DIFC. Dubai has also developed Internet and Media free zones, offering 100% foreign ownership, no tax office space for the world's leading ICT and media companies, with the latest communications infrastructure to service them. In 2020, the UAE established the Ministry of State for Artificial Intelligence, Digital Economy and Remote Work Applications, as part of the UAE's efforts to foster economic diversification and adapt to a globalized economy.
Many of the world's leading companies have now set up branch offices, and even changed headquarters to Dubai. Recent liberalization in the property market allowing non-citizens to buy freehold land has resulted in a major boom in the construction and real estate sectors, with several signature developments, such as the 2 Palm Islands, the World (archipelago), Dubai Marina, Jumeirah Lake Towers, and a number of other developments, offering villas and high rise apartments and office space. Emirates (part of the Emirates Group) was formed by the Dubai Government in the 1980s and is presently one of the few airlines to witness strong levels of growth. Emirates is also the largest operator of the Airbus A380 aircraft. , budgeted government revenues were about AED 29.7 billion, and expenditures were about AED 22.9 billion. In addition, to finding new ways of sustaining the national economy, the UAE has also made progress in installing new, sustainable methods of generating electricity. This is evidenced by various solar energy initiatives at Masdar City and by other renewable energy developments in parts of the country.