The U.A.E.'s main source of income stems from the production of oil and gas. However, the hydrocarbon sector and its contribution to the country's GDP have declined over the last years to an average of 31%.

After Saudi Arabia and Iran, the U.A.E. is the region's third biggest oil producer with an average production of over 2.3 million barrels per day (bpd). In 1999, the U.A.E has reduced its oil output to approximately 2 million bpd as part of the OPEC agreement of March 23, 1999. The OPEC agreed to maintain the production quotas at least until March 2000 in order to further stabilize the oil price recovery.

At the present rate of extraction, reserves are expected to be sufficient to last for over one hundred years. 90% of the present total output of the U.A.E. is produced in Abu Dhabi. Dubai has most of the remaining resources and Dubai's oil reserves are expected to last for approximately 20 years. Sharjah and Ras Al Khaimah produce only small quantities of oil.

The domestic demand for natural gas is expected to have doubled by 2005, in Abu Dhabi to 7.5 billion, Dubai to 1.5 billion cu ft per day. To meet Dubai's fast rising demand, gas is piped from Sharjah and Abu Dhabi (500 million cu ft per day) gas fields as part of gas co-operation agreements. To secure future gas supplies, Dubai plans to pipe 200-700 cu ft per day from Qatar's gas fields as part of the 8-10 billion $ Dolphin Project by the U.A.E. Offsets Group.

In 1998, the construction and manufacturing sector has contributed12% to the GDP of the U.A.E. Thus, the sector has developed into the third largest contributor to the economy after Oil and Trading. In 1998, the U.A.E. had 1,695 registered factories.

Two of the countries largest non-oil industrial enterprises are in Dubai - Dubai Aluminium (Dubai), one of the world's biggest aluminium smelters, and the Dubai Dry Docks. Production from the smelter provides 60% of the country's manufactured exports, while the Dubai Dry-dock has developed into one of the world's top ship repair yards. It repairs or overhauls ships including some of the largest vessels afloat with an average annual turnover of 150 vessels.

The Jebel Ali Free Zone, located between Dubai and Abu Dhabi, accommodates the biggest man-made harbor in the world. By October 1999, about 1,600 have established business branches there. The reason for the Free Zone's success lies in the exemption of the 51% local partnership, which usually is mandatory in the Gulf countries. Further, it provides a 15-year guarantee for tax-free profits, which are 100%, repatriated.

Dubai's second free zone, the Dubai Airport Free Zone, has been established as part of the Dubai Airport expansion. Furthermore, a business park focusing on light industry is under construction.

In 1997, agricultural land has covered 823 million sq m; the number of productive farms has reached 23,930; annual production of vegetables has surged to 769.883 t. The country has 10% of all the world's date palms and annual production ranged around 288.190 t.

Fishing was traditionally a very important part of the country's economy. Today the industry employs some 13,411 licensed fishermen, operating 6,341 fishing boats which net from the coastal waters of the U.A.E. an annual catch of 96,000 t. Commercial fishing is supported by the government which helps fishermen to buy and maintain their boats and also helps them to sell their fish through co-operatives. Part of the catch is processed into animal food or fertilizer and one fourth is exported to foreign markets.

The number of tourists visiting the U.A.E. in 2000 reached over 2.9 million people. Dubai is the number one tourist destination in the U.A.E.

In 1997, there were 19 locally incorporated banks and 27 foreign banks with 262 and 100 branches respectively in the U.A.E. to serve 2.9 million people.

In 1999-2000, the U.A.E. is reported as having the second highest per capita spending in construction worldwide. The U.A.E. follows Japan (4,975 $) with a per capita spending for engineering of 4,339 $. In third place is Germany with 3,873 $.

The U.A.E. exported goods at a value of Dhs 124.9 billion and recorded re-exported goods at a value of Dhs. 38.3 billion. A significant portion (about 40%) of the re-exports is not registered. The main customers of the re-exports are the countries of the Gulf Cooperation Council and Iran.

The German government and several states of the Federal Republic of Germany support this development with official participation in trade fairs, exhibitions and delegations.
In 1998, the U.A.E. was, after the Kingdom of Saudi Arabia, Germany's second important trading partner in the Arab World.