'Oil drop won't affect UAE government spending'

The recent drop in oil prices will not impact the UAE government’s spending as the country holds huge foreign exchange reserves accumulated during the past many years when crude prices were high, said Sultan bin Saeed Al Mansouri, Minister of Economy.
 
Financial surpluses are good enough to support the government for years to come and meet public spending on development projects, the minister said.
 
Standard and Poor’s ratings agency said recently that the UAE, along with Qatar, is the least vulnerable to a sharp drop in oil prices.
 
Al Mansouri said the UAE can absorb shocks in the short-term and overcome negative repercussions from global economy and decline in oil prices as a result of economic diversification.
 
He said continued growth in the non-oil sectors will give the country immunity against oil price fluctuations, in addition to huge foreign assets and large financial surpluses providing safety cushion from external shocks.
 
The minister was speaking at a conference in Dubai to announce the ‘UAE Economic Outlook 2015’ on Tuesday.
 
Al Mansouri said: “The GDP is expected to reach Dh1.55 trillion at the end of 2014 and Dh1.62 trillion by the end of 2015. GDP is likely to grow up to 4.3 per cent by the end of 2014 and 4.5 per cent next year; the growth will continue at a rate of 4.5 per cent for the years 2016 and 2017 and to rise to 4.6 per cent during 2018 and 2019.”

Expo 2020
 
The UAE minister said Expo 2020 will bring financial returns of about Dh139 billion and attract more than 25 million visitors – 70 per cent of them from abroad – to the emirate.
 
Expo 2020 is expected to generate more than about 277,000 jobs between 2013 and 2020 and an investment of $9 billion to build infrastructure and logistics to host the mega exhibition.
 
The number of tourists in 2012 were about 11.2 million with total spending of Dh111 billion. This number is expected to reach 18.8 million tourists in 2022, spending up to Dh113.8 billion by the year 2022, he told the conference in Dubai.

The UAE was ranked ninth in tourism investment in World Travel and Tourism Council index where the size of the state's investment in this sector amounted to Dh92.9 billion in 2013 compared with Dh84.3 billion in 2012, growing by around 10 per cent. It is expected that the tourist numbers will rise 7.2 per cent with investments reaching Dh104.4 billion in 2014 and grow to Dh137.9 billion in 2022.
 
He said these investments will be concentrated in the establishment of recreational amenities, hotels and other tourist projects.
 
According to an Unctad report, the cumulative foreign direct investment during the period from 2007 to 2012 in the UAE was estimated at Dh202.1 billion.
 
He said the national agenda is to achieve non-oil sector expansion of 5 per cent per annum, ranking the country first in ease of doing business, raising the proportion of SMEs, achieving advanced positions in entrepreneurship, innovation and knowledge indices.

 

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