The UAE’s merchandise and services trade totaled $1.258 trillion (Dh4.61 trillion) in 2023, with the services sector driving growth to levels similar to the previous year, according to the World Trade Organization (WTO). While merchandise exports decreased by five percent to $488 billion, imports increased by seven percent to $449 billion, positioning the UAE as the 14th largest exporter and 16th largest importer globally. The country’s merchandise exports and imports accounted for 2.1 percent and 1.9 percent of the global share, respectively.
The drop in merchandise trade was offset by a rise in the services sector, with the UAE government actively working towards establishing the country as a services-based economy. To attract top talents from around the world, the UAE has introduced initiatives like the Golden Visa and Silver Visa, offering long-term residency permits to professionals, scientists, and outstanding students. The country has also signed the Comprehensive Economic Partnership Agreement (Cepa) with several countries, leading to a significant boost in trade and commercial services sectors.
According to WTO’s annual report, merchandise imports in most economies declined due to falling commodity prices, except for a few large energy exporters like the UAE, Russia, and Saudi Arabia, which saw an increase in imports. In terms of commercial services, the UAE was ranked 13th globally, with exports up by eight percent to $165 billion, while imports rose by 13 percent to $108 billion, making it the 18th largest importer. Additionally, the UAE ranked 20th globally in digitally delivered services, reaching $48 billion in 2023 compared to $46 billion in the previous year.
Globally, the US dollar value of world merchandise trade fell by five percent in 2023 to $24.01 trillion, but this decline was offset by a strong increase in commercial services trade, which rose by nine percent to $7.54 trillion. Looking ahead, WTO projects that world merchandise trade volume is expected to grow by 2.6 percent in 2024 and 3.3 percent in 2025 as demand for traded goods rebounds following a contraction in 2023. The UAE and other Gulf countries’ merchandise exports were impacted by a drop in commodity prices, such as oil and gas, highlighting the importance of diversification in trade activities to mitigate such risks.
In conclusion, the UAE’s trade performance in 2023 showcased resilience in the face of global economic challenges, with the services sector offsetting the decline in merchandise trade. Initiatives to attract top talent and trade agreements with various countries have played a key role in boosting the commercial services sector. As the world economy continues to recover, the UAE is strategically positioned to capitalize on the projected growth in merchandise trade volume. Diversification and innovation will be crucial in ensuring sustained growth and competitiveness in the global market.
