UAE’s current account surplus reaches Dh97.1b as exports rise

Investment income grew, while budget deficit shrank in 2017

The UAE’s current account surplus reached Dh97.1 billion in 2017, accounting for 6.9 per cent of the nation’s gross domestic product.

The surplus is an increase from the Dh48.5 billion recorded in 2016, which accounted for 3.7 per cent of GDP. The surplus increase in 2017 is attributed to the rise in trade surplus, which is primarily linked to developments in oil prices and improvement in economic activity.

The trade surplus rise was accompanied by high investment income and a reduction in the services budget deficit.

Hydrocarbon exports rose by 25.1 per cent (Dh42.9 billion) in 2017 compared to numbers recorded in 2016. This was due to an increase in crude oil prices and other products.

Oil prices

Meanwhile, gross income of investments recorded an inflow valued at Dh10.2 billion in 2017 as a result of rising interest rates and oil prices. Transfers by the private sector increased due to remittances sent home by foreign workers valued at Dh7.7 billion in 2017, while foreign transfers made by the public sector saw a slight decline.

The fiscal account’s deficit decreased by Dh8.4 billion in 2017 compared to 2016, reaching a total value of Dh62.6 billion, comprising 4.5 per cent of the GDP. This occurred due to an increase in the inflow of foreign direct investments in anticipation of World Expo 2020 and as a result of changes in the banking sector’s activity.

The outflow of foreign direct investments abroad increased slightly, recording a value of Dh1.6 billion in 2017. This comes as a result of an increase in foreign direct investments in the UAE, valued at around Dh2.7 billion.