Please ensure Javascript is enabled for purposes of website accessibility

UAE records AED 34.6bn budget surplus in Q1 2022

Khatija Haque - Head of Research & Chief Economist
Published Date: 09 August 2022


  • The UAE’s budget surplus more than tripled in Q1 2022, reaching AED 34.6bn (USD 9.4bn). Revenues surged almost 40% y/y, while current spending grew 19.6% y/y.  Investment spending was much lower than in Q1 2021 however, so total expenditure growth was just 14.5% y/y.  The biggest component of current spending was on general goods and services (up 37% y/y) followed by wages and salaries (up 17% y/y). There was also a 9% increase in grants and social benefits relative to Q1 2021.  We expect the UAE’s budget surplus to widen to 8.3% of GDP this year from 4.5% in 2021, mainly on higher oil & gas revenue. 
  • UAE retail conglomerate Majid Al Futtaim reported consumer spending growth of 22% y/y in H1 2022, with 16% growth in retail spending and 31% growth in non-retail sectors. Within retail, there was strong growth in online spending (41% y/y). Inflation does appear to be having an impact on consumers however, with average transaction values in supermarkets and hypermarkets down -12% y/y in H1 2022 as consumers shift to lower value items and higher frequency purchases.  

Today’s Key Economic Data and Events

  • 14:00 US NFIB small business optimism index

Fixed Income

  • Concerns about growth continued to weigh on sovereign bond yields overnight. The US 10y yield declined 7bp to 2.76% while the 2y yield fell 2bp to 3.21%, leading to even deeper yield curve inversion.    
  • 10y bunds and gilts were unchanged at 0.9% and 1.95% respectively.


  • The US dollar lost ground against major currencies yesterday. EUR and GBP closed slightly firmer but JPY was fractionally weaker.
  • Commodity currencies were also mixed with AUD up 0.9% against the USD while CAD weakened a quarter of a percent.  


  • Most major global indices closed higher yesterday but the S&P closed down -0.1% after a strong start, following disappointing Q2 earnings from some reporting companies yesterday. Volumes were relatively light.
  • Regional indices posted gains for the most part on Monday, with the Abu Dhabi GI rising 1.9% and the DFMGI up 1%. The Tadawul ASI closed 0.7% higher yesterday.  


  • WTI gained almost 2% yesterday while Brent closed 1.8% higher yesterday but is trading slightly weaker in Asia this morning on news that the EU has presented the parties to the JCPOA with a final draft accord that would allow Iran to resume oil exports and gain other economic benefits in exchange for eliminating stockpiles of enriched uranium. Both Iran and the US will need to decide whether or not to agree to the deal within a few weeks, with disagreement on a number of issues including IAEA inspections.  

Click here for charts and tables