Abu Dhabi to grow to 5% in 2012

Abu Dhabi's economy is expected to expand by up to 5 per cent next year, not far from the long-term target rate of 6 per cent annually, and the government will continue spending to support growth, a government official said on Monday.

"For this year, the real growth will be about 4.5 per cent. Next year, I will assume it will be the same level -- 4.5, 5 per cent," Mohamed Omar Abdulla, Undersecretary at Abu Dhabi's Department of Economic Development, told Reuters on the sidelines of an economic forum in the UAE capital.

Abdulla said growth was being helped by efforts to diversify Abu Dhabi's economy and that sectors other than oil were now accounting for about 50 per cent of growth in the emirate.

A Reuters poll last month predicted the UAE as a whole would expand 3.8 per cent this year and at the same rate next year. The 2012 forecast was cut from 4.0 per cent predicted three months earlier because of worsening global conditions.

SPENDING ADJUSTED

Abu Dhabi has run a budget deficit for the past two years, partly due to a doubling of spending on development in 2009 and after its $10 billion bailout of fellow emirate Dubai after a property bubble burst in 2008.

But Abdulla, while declining to give specifics, said the emirate would continue spending actively on education, health and infrastructure.

He said some spending plans were being adjusted "in response to the circumstances around us", but that "the strategy will be the same, to support growth".

"The spending ... will continue in general. The government of Abu Dhabi will continue to spend as usual on the economy and of course we have many plans in terms of infrastructure."

Abu Dhabi spent Dh245.5 billion ($66.8 billion) last year, 6 per cent less than in 2009, government data shows. The emirate, which accounts for some 71 per cent of UAE fiscal spending, did not publish its 2011 budget plan.

Its budget deficit more than halved to Dh57.1 billion, or 9.2 per cent of GDP, in 2010.

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