UAE Capital Markets Key IndicatorsApril 2018
KEY HEADLINES
• The UAE’s GDP increased by 1.7% in 2017. GDP
growth is expected to gain momentum in 2018
to 3.3% and 3.6% in 2019.
• UAE Purchasing Managers’ Index (PMI) fell to
54.8 in March 2018. Growth of the UAE’s non-
oil private sector eased in February, with
business conditions improving at the weakest
pace since September 2017.
• Inflation has surged to 4.45% as at February
2018. This has been driven by increasing
transportation and consumer goods costs.
• Oil prices have risen to $69.6 pb as at March
2018, up from $53.7 a year earlier - the highest
price since Nov 2014. Increasing demand for oil
and supply management by OPEC has
underpinned growth.
FIGURE 3
Inflation, Y-o-Y % Change
Inflation has surged to 4.45% as at February 2018. This
has been driven by increasing transportation and
consumer goods costs.
FIGURE 4
Oil Prices
Oil prices have risen to $69.6 pb as at March 2018, up
from $53.7 a year earlier - the highest price since Nov
2014. Increasing demand for oil and supply
management by OPEC has underpinned growth.
Latest 3 months ago 12 months ago
Oil Prices – Brent Crude ($) 69.6 66.6 53.7
The UAE’s GDP increased by 1.7% in 2017. GDP
growth is expected to gain momentum in 2018 to
3.3% and 3.6% in 2019.
FIGURE 1
UAE GDP, Y-o-Y % Change
FIGURE 2
Employment Forecasts, Y-o-Y % Change
2017 2018 2019
UAE Employment Forecasts % Change 0.7 1.2 1.5
Employment growth in 2017 registered at 0.7% and is
forecast to rise to 1.2% in 2018 and 1.5% in 2019 as
corporations look to resume hiring plans amid a more
favourable global economic outlook.
FIGURE 5
Purchasing Managers’ Index
Latest 3 months ago 12 months ago
Composite PMI 54.8 57.7 56.2
UAE Purchasing Managers’ Index (PMI) fell to 54.8 in
March 2018. Growth of the UAE’s non-oil private
sector eased in February, with business conditions
improving at the weakest pace since September 2017.
Latest 6 months ago 1 Year ago
CPI Inflation (%) 4.45 1.14 2.67
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RESEARCH
Taimur KhanSenior Analyst
+971 4 4267 660
FIGURE 9
Nominal broad effective exchange rate index, the AED’s performance
against key currencies
1 month 3 months 12 months
Effective Exchange Rate % Change 1.45 -1.97 -6.44
The AED has depreciated 7.2% from January 2017.
For the broader economy this is positive however this
may lead to increased inflation.
FIGURE 10
Abu Dhabi and Dubai Financial Markets, 1 Year % Change
FIGURE 11 – Chart of the month
Country competitiveness 2018
Dubai’s broad index is down 10.7% and Abu Dhabi’s
general index is up 3.2% in the year to Q1 2018.
The UAE ranked 21st in the global context, this is up
from the 2017 position of 26th. There is room for
improvement in certain elements which could help
improve the country’s global profile as a business hub.
FIGURE 7
Interest Rates
Borrowing rates have steadily risen over the last year
due to the Federal Reserve’s rate hikes on the back of
positive economic data.
10th Jan 3 months ago 12 months ago
3-Months EIBOR(%) 2.39 1.76 1.46
6-Months EIBOR(%) 2.60 2.03 1.68
1-Year EIBOR(%) 2.83 2.56 2.20
FIGURE 8
Foreign Exchange Rates
Positive economic data across the Eurozone has
strengthened the Euro against most currencies. Given
the transition agreement between the EU and the UK,
the Pound has strengthened over the last month.
Latest 3 months ago 12 months ago
AED to EUR 4.50 4.41 3.91
AED to GBP 5.15 4.96 4.58
FIGURE 6
Deposits and Loans, Y-o-Y % Change
Year to Nov
20171 Year % Change 1 Year % Change
Deposits 2.4% Credit 0.7%
Year-on-year deposits growth has slowed to 2.4%,
the lowest rate since late 2015. Credit growth has
been positive but moderate over the same period.
Credit growth in 2018 is forecast to increase to 5%.
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