UAE current account surplus expected to narrow to 7.7% of GDP in 2025: Fitch Solutions’ research unit BMI sees the UAE current account surplus narrowing to 7.7% of GDP in 2025, down from an estimated 8.2% in 2024, BMI said in a report. This forecast is a more bearish one than the consensus, which “foresees a narrowing from 9.5% of GDP in 2024 to 8.5% of GDP this year,” according to BMI.

Driving the drop: While BMI sees the services surplus widening throughout the year, the goods trade surplus is expected to fall on the back of “lower oil and non-oil exports,” coupled with a robust increase in imports. The research unit took into account trends recorded in 2024, which showed a 14.6% rise in imports that “more than offset the strong increase in non-oil exports and re-exports.” Rising imports along with a slowdown in Brent prices and increased oil production restrictions are all factors that are expected to carry over to this year, causing the goods trade surplus to narrow further.

Where BMI sees oil prices this year: BMI’s oil and gas team sees Brent prices falling by 4.8% in 2025. The decline in prices means that the research unit also sees oil exports dropping to 10.8% of GDP this year, down from a projected 12.4% of GDP in 2024 — a fall that it sees coming despite higher output levels.

Non-oil exports are also set to see a slight decline: Non-oil exports and re-exports are seen dropping to 49.8% of GDP in 2025, down from 52.5% of GDP in 2024 on the back of “stronger increase in nominal GDP, slower growth in precious metal prices (precious metals exports account for 15.8% of total exports) and weaker demand in key partners such as China, Türkiye and the US,” the report reads.

Imports are also set to increase at a slightly slower pace, slipping to 59.2% of GDP from 61.3% in 2024. This slowdown is expected to be driven by lower global food prices and slower growth in gold prices, but it will be offset by a “strong demand for capital imports given large-scale infrastructure projects.”

Potential risks could bring down our surplus further: US President Donald Trump’s potential oil policies and regional geopolitical tensions stand as two key risks that could further narrow the UAE’s surplus. A decision from Trump to increase the US’s oil supply could prompt “Opec+ to further prolong or increase the supply restrictions,” which would lead to a sharper contraction in the UAE’s oil exports. Meanwhile, a breakdown in ceasefire negotiations in Gaza and a subsequent return of unrest could have an impact on the UAE’s port activity and reduce transport receipts, while an escalation of tension between the US and Iran could lead to disruptions in the Strait of Hormuz — another factor that could impact the UAE’s ability to export.

Remember: Opec+ agreed to stick to plans to revive supply in April following repeated delays, according to a statement last week. The group cited “healthy market fundamentals” and a “positive outlook,” but kept the door open for future changes in policy, saying the increase may be paused or reversed depending on market conditions. The UAE is set to see a higher production quota of 3.5 mn barrels per day in 2025, up from the current 2.9 mn, after the oil cartel agreed to raise its production quota last year.

Despite the risks, the Emirates are well positioned to weather any economic shocks thanks to FX reserves of USD 218.5 bn, the report said. Growth in services exports may also partially offset the negative impact of the narrowing surplus thanks to an uptick in tourism, logistics activities, and secondary income from the UAE’s foreign population. Additionally, any potential US tariffs aren’t set to have much impact, as aluminum exports to the US only make up 1% of the UAE’s total exports.

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