The UAE's trade with the rest of the world is set to grow, bolstered by its focus on growing its non-oil sector, the country's wider reach to markets through trade deals and the reopening of the Chinese economy, according to analysts.
Trade will continue to be an important pillar of the Emirates' economy and is expected to diversify further beyond oil exports as the Gulf country identifies areas of future growth, from advanced manufacturing to creative industries, they said.
"We expect trade in goods and services to expand and be stimulative of economic growth," Scott Livermore, chief economist at Oxford Economics, said.
The UAE, a global transport and logistics hub, is expected to register an increase in the trade of goods this year, despite global headwinds such as economic fragmentation and nearshoring in a post-pandemic world.
"We expect the volume of trade to remain robust, even if economic challenges in Europe and the US limit growth. However, emerging markets and Asia are likely to see much strong growth, especially following the reopening of China, and this is likely to present some opportunities for the transport and logistics sector in the UAE, as will continued normalisation of supply chains," Mr Livermore said.
The UAE's aviation sector will also benefit from the continued rebound in travel and tourism, particularly the long-haul travel market that is key for airlines such as Emirates, he added.
Last week, Sheikh Mohammed bin Rashid, Prime Minister and Ruler of Dubai, said the UAE's trade is set to surge further this year following strong growth last year.
The UAE accounted for 2.4 per cent of the world's goods exports last year, according to the World Trade Organisation's Global Trade Outlook and Statistics report released last week.
The country's goods trade with the rest of the world hit $1.024 trillion in 2022, with exports and imports increasing due to higher crude oil prices, the WTO said.
The value of its exports reached $599 billion last year, marking annual growth of 41 per cent, while imports reached $425 billion, accounting for 1.7 per cent of global merchandise imports.
The UAE was ranked 11th in the world among the top commodity-exporting countries, the report found.
The country is taking several steps to further boost its trade volumes.
Dubai's D33 economic agenda, which aims to double the size of its economy with a target of reaching Dh32 trillion ($8.71 trillion) by 2033, also aims to double the size of the emirate’s foreign trade and add 400 cities to its foreign trade map in the next decade. The 10-year strategy also seeks to establish Dubai among the top three global cities and a preferred destination for major international companies and investments.
"Growing international trade is a key component of both Dubai’s D33 and the UAE’s long-term growth strategy. This goes hand in hand with the plans to boost the size of the UAE’s manufacturing sector, and increasing the value-added in UAE goods exports," Khatija Haque, chief economist and head of research at Emirates NBD, said.
"Trade agreements will go some way towards boosting the UAE’s non-oil trade in the coming years, as will broadening the UAE’s international trade network."
The UAE’s non-oil foreign trade rose 17 per cent annually to hit a record Dh2.23 trillion last year as the Emirates put in place measures to diversify its economy and boost its economic partnerships.
It aims to eliminate unnecessary trade barriers, increase market access and set up investment and trade ventures with its partners.
The country has already signed Cepa deals with India, Israel, Indonesia and Turkey, and is close to finalising agreements with Cambodia and Kenya. It also announced the start of Cepa negotiations with Vietnam last week.
The Cepa deals "lay the foundation for future growth" of the UAE's trade, Mr Livermore said.
"The UAE’s approach to recent trade deals has been focused on agreeing Cepas with a wide range of countries and not just major markets," he added.
The UAE is set to become a key driver of global trade growth, with its exports projected to expand at an average annual rate of more than six per cent to Dh1.1 trillion by 2030 as the country focuses on diversifying its economy away from oil, according to a January report by Standard Chartered.
Metals and minerals, gold, machinery and electricals will dominate the country’s exports over the next decade, with India and mainland China being the principal export markets, it said.