In a significant financial revelation, the United Arab Emirates (UAE) announced a remarkable surge in revenue for the year 2022, marking a substantial 31.8 per cent increase. The announcement, made by the country’s Finance Minister, underscores the UAE’s enduring commitment to expanding and diversifying its economic landscape.
The UAE, renowned for possessing one of the Gulf’s most diversified economies, has made concerted efforts to reduce its reliance on oil-related revenues. These efforts have manifested in a strategic focus on developing non-oil sectors, with particular emphasis on trade, tourism, manufacturing, logistics, and financial services.
According to the state news agency WAM, citing Finance Minister Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, the country witnessed a notable 6.1 per cent increase in spending during 2022, with expenditures totalling approximately 427 billion dirhams ($116 billion). Despite this uptick in spending, the UAE has adopted a cautious and rational fiscal approach, aiming to fortify its fiscal buffers and mitigate potential financial risks.
While the precise figure for the full-year fiscal surplus was not disclosed, the central bank had previously reported a surplus of $46 billion for the first nine months of 2022. This surplus was propelled by robust growth in both oil and non-oil revenues, supported by elevated oil prices.
Further illustrating the UAE’s economic resilience, acquisitions of non-financial assets experienced remarkable growth, with a staggering 94.5 per cent increase observed in 2022 compared to the previous year.
The United Nations Conference on Trade and Development (UNCTAD) added another layer of validation to the UAE’s economic prowess, reporting a 10 per cent surge in foreign direct investment (FDI) flows into the country in 2022, reaching a record-breaking $23 billion. This accomplishment is particularly noteworthy given the global downturn in FDI, which witnessed a 12 per cent contraction during the same period. The UAE’s ability to attract substantial FDI reflects its robust economic standing on the international stage.
As part of its ongoing diversification drive, the UAE has established a federal entity tasked with regulating the gaming industry. This development is exemplified by Ras Al Khaimah, one of the UAE’s seven emirates, embarking on a groundbreaking project – the $3.9 billion Wynn Resort, featuring a casino. The introduction of gambling facilities in the UAE underscores its determination to stay competitive in the Gulf region, especially in the face of economic rivalry with Saudi Arabia.
The UAE’s journey towards economic diversification has been punctuated by a series of progressive legal reforms aimed at maintaining its status as the Gulf’s preeminent trade, tourism, and financial hub. The country’s resolute pursuit of economic diversification, coupled with its impressive fiscal performance, positions it as a formidable player on the global economic stage.