Deep recession in 2020 but economic fundamentals to remain resilient thanks to SWFs


MEDIUM RISK for enterprise

  • Economic risk

  • Business environment risk

  • Political risk

  • Commercial risk

  • Financing risk

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GDP USD414bn (World ranking 29, World Bank 2018)
Population 9.63mn (World ranking 92, World Bank 2018)
Form of state Federation
Head of state H.H. Sheikh KHALIFA bin Zayed Al Nahyan
Next elections 2023, legislative
  • Regional co-operation through the GCC
  • Political and social stability, with established method of succession
  • Abundance of natural resources (hydrocarbons)
  • Large asset holdings and investments held overseas; net creditor status
  • Strong financial hub thanks to the Abu Dhabi sovereign wealth fund
  • Actively diversifying economy
  • Relatively liberal business and trading environment
  • Solid fiscal and current accounts, despite some short-term effects from currently weaker oil prices
  • Despite diversification (including further developments in the transport and travel sectors), the economy remains subject to the vagaries of international oil and gas markets
  • High dependence on global and regional markets and events
  • Fixed exchange rate peg to the USD prevents independence of monetary policy
  • Speculative flows (stock market, real estate etc.) provide some concern of asset bubbles
  • Data provision is poor for a high income economy
  • Regional instability

Trade structure by destination/origin

(% of total)

Exports Rank Imports
India 9%
13% China
Japan 8%
12% India
Iran 8%
10% United States
Switzerland 8%
7% Germany
Oman 5%
4% Japan

Trade structure by product

(% of total)

Exports Rank Imports
Petroleum, petroleum products and related materials 31%
9% Gold, non-monetary (excluding gold ores and concentrates)
Gold, non-monetary (excluding gold ores and concentrates) 12%
8% Miscellaneous manufactured articles, n.e.s.
Non metallic mineral manufactures, n.e.s. 7%
8% Road vehicles
Telecommunication and sound recording apparatus 5%
8% Telecommunication and sound recording apparatus
Miscellaneous manufactured articles, n.e.s. 5%
6% Non metallic mineral manufactures, n.e.s.
While the payment behavior of large domestic companies is generally good, dealing with small and medium size businesses may represent a significant risk of non-payment. Since insolvent debtors may be sentenced to a prison term,  their tendency to disappear when things turn wrong is significant.

  • Low

  • Medium

  • Sensitive

  • High

  • Payments

  • Court proceedings

  • Insolvency proceedings

The legal framework is complex and the courts tend to lack independency and reliability while procedural delays and costs may be prohibitive.

Insolvency law does not provide much support when it comes to debt recovery: a debt renegotiation mechanism has been put in place but in practice it remains largely untested and liquidation prevails, thus leaving no chances of recovery to the creditors.


Euler Hermes

Economic Research Team


Manfred Stamer

Senior Economist for Emerging Europe and the Middle East