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UAE's Trade Surplus Plummets by 59% in 2009 Amidst Oil Price Fall and Slowdown in Bank Credit

Strategic Insights

— 1 min read

The UAE's trade surplus decreased by approximately 59% in 2009 compared to the record high of 2008, primarily due to a drop in oil prices and a slowdown in bank credit to commerce and other sectors. According to official data from the Arab Monetary Fund (AMF), the trade surplus fell from $63.5 billion (Dh233bn) in 2008 to around $25.8 billion (Dh94.6bn) in 2009. This decline turned the country's current account surplus of 8.8% of GDP in 2008 into a deficit of nearly 2.7%.

Key Takeaways:

  • The UAE's trade surplus declined by approximately 59% in 2009 compared to 2008, primarily due to a drop in oil prices and a slowdown in bank credit to commerce and other sectors.
  • The country's total exports of goods slumped to nearly $163 billion in 2009 from a record $239.8 billion in 2008, with a decline of nearly 32% in exports last year.
  • Oil prices tumbled by about 35% to an average $62 in 2009 from a record high of $95 in 2008, and the UAE's crude output is believed to have dipped by nearly 10% to an average 2.25 million barrels per day last year.
  • The slowdown in bank credit has sharply stifled growth in the domestic economy, especially in non-oil sectors such as trade, construction, real estate, and personal loans.
  • Analysts attribute the slowdown in bank credit to the global fiscal crisis and debt default problems involving the Saudi Saad and Algosaibi family conglomerates.

Statistics:

  • Trade surplus decreased by approximately 59%
  • From $63.5 billion (Dh233bn) in 2008 to around $25.8 billion (Dh94.6bn) in 2009
  • Current account surplus decreased from 8.8% of GDP in 2008 to a deficit of nearly 2.7%
  • Total exports of goods slumped from $239.8 billion in 2008 to $163 billion in 2009
  • Oil prices declined by 35% from $95 in 2008 to $62 in 2009
  • UAE's crude output dipped by 10% from 2.5 million barrels per day in 2008 to 2.25 million barrels per day in 2009
  • Bank credit growth plummeted from 49.3% in 2008 to 1.9% in 2009

Sources:

  • Arab Monetary Fund (AMF)
  • Central Bank
  • UAE Government statistics
  • Euclid Infotech Pvt. Ltd.
  • Syndigate.info an Albawaba.com company

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