The bilateral trade between Italy and the UAE recorded a growing trend starting from 2005, followed by a peak in exports and an increase in imports in 2008. In fact, during this period, the UAE was on a positive growth trajectory, then the economy contracted in 2009 as a consequence of the severe crisis that hit international markets in 2009. Starting from 2011, the UAE’s economy resumed its growth at a rapid pace and this led to a total increase in GDP of 4.7 percent in 2013. This rapid growth underpinned the increase in the volume of imports and exports. However, this growth was not stable, especially throughout 2016 and 2017 due to the driving down oil prices, therefore the trend of the bilateral trade fluctuated after 2015. Despite that, over the course of 2015, the positive trend of Italian exports in the Country remained constant registering a massive increase of 16 percent over the previous year. The volume of imports has progressively decreased since 2013, with a decline of 21 % in 2019.
The UAE is the twenty-first market for Italian exports, with a market share that in the last three years increased from 2.6 percent to 2.8 percent with a positive balance of 4.6 billion euros in 2019. During the first months of 2020, the COVID-19 pandemic dealt a severe blow to the UAE’s economy. As a result, there was a 16.9 percent reduction in the value of exports, which dropped from 2.2 billion to 1.8 billion. The sectors particularly affected by this contraction were jewelry (the top imported item in 2019), ships, maritime transportation, and cosmetic products. However, in the last year, there has been an increase in the export of pharmaceuticals and plastics.
Italian export in the agri-food sector recorded a decrease of 10.3 percent, registering a total of 146.6 million, a figure lower than the 131.7 million in 2019. This sector has a strategic value for the UAE which has a population growth rate of 3 percent per year and imports about 80% of their food needs due to the low level of domestic production. Moreover, the agri-food sector represents a driving sector for the Italian economy, which currently holds a 2.4% market share on the UAE’s market. In recent years, consumers in the UAE have progressively turned towards the purchase of healthy foods, therefore there has been a growth in the demand for low-fat organic products. Infact, as can be seen from the data, the categories most affected by the drop in exports were those with the highest sales volumes recorded in 2019, like fruit (-46.4%) and vegetables (-26.8%) followed by drinks (-41.6%). However, an important increase in the export of seeds, oily fruits (+ 30.7%) and cereal-based preparations (+ 22.9%) should also be noted.
Despite the economic shock caused by the pandemic, the UAE economy has proved resilient to the slowdown in the global economy thanks to its dynamic economy, openness, and GDP per capita among the highest in the world. Recent forecasts from SACE (the Italian insurance and financial group) indicate that the trend of Italian exports in 2021 is likely to continue its steady expansion.