United Arab Emirates 

United Arab Emirates country policy

Policy established 14 December 2009

• The country ceiling is 2000 mln euro
• Early warning signal 1500 mln euro
• - of which was used as at 2010-07-31 430 mln euro

Country class: 3

Abu Dhabi: geen beperkingen; Dubai: opgeschort; andere Emiraten: case-by-case

Overheidsdebiteuren in Ajman, Fujairah, Ras-al-Khaimah en Umm-al-Qaiwain: onherroepelijk accreditief, bankgarantie, betalingsgarantie Minister van Financiën VAE of centrale Bank VAE

Abu Dhabi: no restrictions; Dubai: suspended; other Emirates: case-by-case

Public buyers in Ajman, Fujairah, Ras-al-Khaimah en Umm-al-Qaiwain: ILC, bank guarantee, g'tee MoF UAE or central bank UAE.

United Arab Emirates country facts

Atradius DSB Economic Research
Country Report last updated :  Nov 18th, 2009   
Country :  UNITED ARAB EMIRATES 

Political Situation
Stability Will Be Maintained

Head of state
President Sheikh Khalifa bin Zayed Al Nahyan (since 2004) and Emir of Abu Dhabi. Vice president PM Mohammed bin Rashid al-Maktoum (since 2006), also emir of Dubai.

Form of government
The Supreme Council of Rulers, all unelected seven Emirs have a seat, appoints Council of Ministers and Federal National Council (‘Parliament’, only advisory tasks).

Internal Economic Situation
Recession, Low Inflation, Budget Deficit

General situation
Poor performance in 2009 (between brackets ’08 figures): real GDP contraction of 4% (+/+ 7,4%), inflation of 1% (16%) and budget deficit of -0.3% (+/+ 14%). Sharp reduction in construction (Dubai), OPEC oil production cuts (Abu Dhabi), very weak FDI and domestic investments, fall in population (less expatriates). Low inflation because weaker domestic demand, oversupply in housing market, lower food/commodity prices, stronger USD. Oil sector counts for 40% of total production; Domestic interest rates slightly above US rates; dirham is set to maintain peg (since 1980) to USD. Still rather strong banking sector, profits eroded in 2008-2009. Most institutions are (at least partly) state owned; concerns over maturity mismatch. Default of Dubai world. Because of too aggressive real estate lending in past. Possibility of rise in NPL. Dirham USD peg still supported by strong SWF and NFA. Abu Dhabi bought USD 10 bn Dubai bond to inject liquidity in Dubai.

External Economic Situation
Weakened In 2009, Still Small Surpluss Ca

Main sources of foreign exchange
Oil and gas (45% XG&S), re-exports (55%).

Main foreign markets
Asia 32% (Japan 24%), Middle East (11%) and EU (11%).

Main expenses of foreign exchange
Consumer goods (53% of total imports) and capital goods (36% of total imports).

Balance of payments
Very open economy, re-exports (transit trade) from Dubai. Still dependent from volatile oil receipts
Restored credit growth (12%) and smaller public budget surplus of 2% GDP.
External economic situation
Currency peg not at stake; in 2010 stronger BOP expected because of higher oil price and modest rising imports. CA surplus of 5% GDP.