By Mehmood-Ul-Hassan Khan
The United Arab Emirates GDP has crossed Dh1 trillion mark in 2010 due to rigorous diversification of macro-economy, rapid industrialization, small and medium enterprises contributory role, infrastructure, trade, service sector and tourism. It also highlights the UAE government’s strong commitment as in the last year in November, the country’s minister of economy Sultan bin Saeed Al Mansouri predicted that the GDP is expected to reach Dh1 trillion by the end of 2010.
According to the recent research study of the Emirates Industrial Bank, the UAE GDP increased by around 6.2 percent in 2010, compared with only about 1.3 per cent in 2009. The report further said that the UAE’s GDP in current prices surpassed the Dh1 trillion mark last year for the first time and all the sectors of the economy performed very well.
The report revealed that the non-oil sector expanded by about 5.1 per cent to Dh653.5 billion last year from Dh621.7 billion in 2009.
It is mentioned in the study that the non-oil sector recorded growth last year despite the downturn in some sectors, including real estate and construction growth was mainly driven by the large expansion in the industrial sector and the recovery in the tourism and services sectors. According to the study, several internal and external factors, including the increase in oil prices, contributed to growth in the country’s GDP, the largest in the Arab world after the Saudi economy.
The study indicated that the industrial sector increased by about seven per cent to Dh127.6 billion in 2010 from Dh119.2 billion in 2009, raising its contribution to GDP to around 12.8 per cent last year, the second largest component after oil.
It is also remarkable achievement that the UAE’s economy recorded growth last year despite the continued bad debts of the global banks and financial crunch. The growth in the non-oil sector will help banks to improve their performance and extend more loans in 2011.
The global economic meltdown hit the advanced as well as developing economies across the globe. The United Arab Emirates economy was one of the few countries to show remarkable resilience to the crisis, because of the strength of its economic fundamentals, and the confidence boosting measures taken by the government.
Projections for the 2011
It is predicted that the Abu Dhabi’s economy to grow by nearly 3.8 per cent in 2011 and the non-oil sector will likely drive that growth. According to Abu Dhabi Chamber of Commerce, investments in oil sector may climb to a record high of around Dh33.7 billion in 2011, nearly Dh4 billion above 2010.
Moreover, Abu Dhabi’s real GDP is forecast to expand to about Dh567.3 billion, an increase of 3.8 per cent.The bulk of the growth is projected in the non-oil sector, which will swell by nearly 5.1 per cent to Dh258.5 billion this year from Dh246 billion in 2010.
The report showed total investments in the UAE could expand to around Dh112.7 billion this year from Dh98 billion in 2010.
The report indicated that in current prices, Abu Dhabi’s economy, the largest in the UAE, is forecast to grow by around eight per cent from an estimated Dh546.7 billion in 2010 to nearly Dh590 billion in 2011.
Growth in the nominal economy will lift the emirate’s GDP per capita income to nearly Dh201,000 from Dh198,000 in current prices while real GDP per capita is expected to slip to Dh193,600 from Dh198,200.