The UAE has traditionally been known as an oil-rich region that relies heavily on oil exports to keep its economy going. It is aware of what is happening in the world because it is very connected, and it has started reducing its reliance on oil as it prepares for a world that will be less reliant on fossil fuels. One of the areas it is interested in and has invested heavily in is trading.
The Dubai financial markets are already trading more than $5 trillion daily, while non-oil trade between the UAE and other countries has grown by 2% in 2023. Such trading has significant economic effects on the region that we will explore in this article.
GDP Growth
GDP (Gross Domestic Product) measures the value of all final goods and services produced in a country or region. With its continuing growth, trading now contributes significantly to the UAE’s GDP.
The region’s financial sector, which includes asset management, banking, foreign investments, forex trading activities in UAE, and more, has grown significantly. This has happened with the help of the Dubai Financial Services Authority (DFSA), which has set up regulatory measures to create a better trading and investment environment tailored to attract investors and traders.
Job Creation
As the UAE’s financial sector grows, it needs qualified people to handle different roles and responsibilities. This demand has led to the creation of numerous job positions in areas such as regulatory oversight, asset management, banking, and investment.
In addition to attracting local talent, the UAE also attracts skilled professionals from around the world who also contribute to its GDP.
Increased Cash Inflows
One of the most significant impacts of trading on UAE markets is a healthy inflow of foreign funds. The conducive trading environment and strict regulations attract foreign investors can use brokers like HF Markets for forex trading and other investments. These cash inflows are crucial for economic growth and provide vital cash reserves that ensure economic stability.
Oil prices are volatile, hence a push to reduce reliance on the commodity. This volatility affects local currencies, but vital foreign cash reserves help stabilize them.
Attracting Foreign Investments
Seeing how successful its financial services sector has been in the last few decades, multinational companies are opening new locations in the UAE to take advantage of this. These companies are also looking to take advantage of UAE’s business-friendly environment and strategic location, both crucial in trades and investments outside the financial services sector.
Trading Activities in UAE outside the financial sector has also led to other developments that contribute to economic growth. For example, the UAE has invested billions of dollars in infrastructure and will continue to do so in the coming decades as it strengthens its position in the region.
New Technologies and Innovations
Dubai and other cities are feeling pressure to meet the demand associated with a growing financial and trading sector. The solution they have come up with is developing new technologies and innovations that help them meet today and tomorrow’s needs. These technologies are already being used in other sectors, further increasing their net benefits.
The UAE is becoming a global financial and trading hub that does not want to only be known for its oil. It has created a trading and business environment that attracts foreign investments and leads to job creation, GDP growth, and other economic benefits.
