As the post covid economy gained momentum, the non-oil foreign trade of UAE witnessed an increase of 27% yearly during 2021 to reach Dh1.9 trillion, equivalent to $517.27 billion.
Even in 2021, the non-oil foreign trade registered more than 11% higher growth compared to the pre-Covid levels in 2019, highlighted Vice President and Ruler of Dubai, Sheikh Mohammed bin Rashid in a tweet on Sunday, 27th February 2022.
The Minister of State for Foreign Trade, Dr Thani Al Zeyoudi noted, “This rebound proves our economy’s resilience and underlines our status as a major international trade hub.” The Minister also added, saying that the increase was a “record single-year leap”.
The UAE government also released a statement quoting, “These results come in light of the launch of the Projects of the 50 and the continuous efforts being implemented by the country to enhance its position on the international trade map and ensure an attractive, active and open commercial environment to the world and linked to a diverse and strong network of global supply chains. Non-oil foreign trade of all emirates registered a rise last year.”
The economic recovery of the UAE has gained momentum due to the country’s timely and rapid anti-pandemic response including widespread testing, containment and vaccination drive. Furthermore, the country has also rolled out several fiscal and macro-economic policies to accelerate the economy and help the hardest hit business sectors e.g. retail and tourism sectors rebound. The International Monetary Fund (IMF) said in its report dated 27.02. 2022.
As per IMF estimate, the UAE’s economy grew 2.2% in 2021, driven by a 3.2% expansion in the non-oil sector. The International financial institution expects UAE’s economy to grow by 3.5% in 2022, on the back of the expansion of the non-oil economy by 3.4%.
The Central Bank of the UAE (CBUAE) forecasts the economic growth of the country to be pegged at 4.2% in 2022, over 10% higher than the previous year’s forecast of 3.8%. Dubai Media Office reported a 27% rise in non-oil trade during the first half of 2021 amounting to Dh 900 billion.
UAE revealed its plan for a Comprehensive Economic Partnership Agreement (CEPA) with seven other countries last year, including the UK and South Korea. The country has just concluded its CEPA with India in February 2022.
The CEPA with India, the 3rd largest economy in Asia after China and Japan, is all set to promote the country’s non-oil trade further taking it to $100 billion over the next five years, from $60 billion currently. It is believed that many Indian investors will seek Dubai company incorporation due to the emirate’s strategic location and its status as one of the leading international financial hubs.
The country’s non-oil exports surged by 33.3% in terms of value to Dh 354 billion, surpassing the Dh 300 billion mark for the first time in the history of the nation and up by 47.3% of the pre-covid level in 2019.
UAE’s re-export trade registered an increase of 27.7% annually to Dh 521.3 billion, 1.6% higher than that of 2019 while the imports clocked a 23.8% jump to about Dh 1 trillion, an increase of around 7% compared to 2019.
In 2021, China was the largest trading partner of UAE and accounted for about 11.7% of the total global foreign trade witnessing a year on year rise of 27% to Dh 212 billion in non-oil trade.
India was the second-largest trading partner, accounting for 8.7% of total non-oil trade and amounting to Dh164.4 billion. Saudi Arabia too contributed significantly with Dh 125 billion of non-oil trade as the third-largest trading partner.
The 27% year on year growth of non-oil foreign trade showcases consistent growth across all business sectors and signals the most opportune time to all prospective investors for business-setup-in-Dubai.