The global fiscal turmoil largely stifled growth in Abu Dhabi’s financial sector despite massive support provided by the government.
According to official data, gross fixed capital formation (local investment) in the banking and insurance sector grew by around 5.9 per cent in 2009 compared with as high as 29 per cent in 2008.
The figures by the Abu Dhabi Department of Economic Development showed growth in the value added in the sector also slowed down to about four per cent last year from nearly 11 per cent in 2008.
The report said the impact of the crisis could have been more severe without the measures taken by the government to support the sector, including injecting liquidity into banks, guarantee deposits and boosting their capital.
“The actions taken by the government contributed to the minimization of the effects of the crisis at the local and federal levels and helped to reduce the outcomes of the crisis on financial institutions and insurance activity,” it said.
Despite the slowdown, the financial sector’s contribution to Abu Dhabi’s gross domestic product rose to around 5.8 from 4.6 per cent in the same period.
The report showed the gross capital formation in the banking and insurance services jumped from around Dh310 million in 2004 to Dh1,098 million in 2009, recording an annual growth of nearly 28.8 per cent.
The sector’s value added nearly doubled from around Dh15.3 billion in 2004 to Dh31.6 billion in 2009, an annual rise of 15.7 per cent, it said.