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19 March 2024

UAE economy soars 231 times

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By Staff

The UAE’s economy has jumped by nearly 231 times since the union was created by seven emirates in 1971 and the increase catapulted the country to become the second largest Arab economy after Saudi Arabia.

From a negligible Dh6.5 billion in 1971, the UAE’s gross domestic product (GDP) is expected to rocket to an all time high of Dh1.45 trillion in 2013, the Ministry of Economy said in a report marking the national day.

“GDP has recorded growth in most of the federation’s years…it is expected to reach Dh1.45 trillion this year and continue its growth to peak at Dh1.5 trillion,” it said.

The report noted that the surge in GDP was a result of expanding hydrocarbon revenue, growth in the non-oil sector and massive investments pumped by the public and private sectors. It projected an investment of nearly Dh918 billion over the next five to 10 years, adding that contracts worth nearly Dh73 billion were awarded in 2012.

Real GDP is forecast to grow by around 4-4.5 per cent this year, far higher than the rate recorded over the past five years of 2.3-3.5 per cent, it said.

Non-oil trade, handled mostly by the Gulf’s business hub of Dubai, shot up by around 28 times over a period of 32 years to reach Dh1.2 trillion in 2012 compared with nearly Dh41 billion in 1981, the report said.

According to the Arab League, the surge in trade turned the UAE into the largest consumer market in the region after it overtook Saudi Arabia in imports.

The UAE’s imports of goods and services totalled $273.5 billion in 2012, the highest volume in the Arab world, accounting for almost 27 per cent of the region’s total trade of goods and services of around $1,022 billion, showed the figures by the League’s Inter-Arab Investment Guarantee Corporation (IAIGC).

Saudi Arabia emerged as the second market, with imports of around $211 billion, followed by Iraq, with nearly $77 billion and $Algeria with $67 billion.

As for exports, the UAE came second, with about $314 billion while it also was ranked second in terms of total trade of goods and services, handling nearly $588.5 billion.

The sharp rise in its GDP turned the UAE into one of the richest nations in the world after it was among the poorest before oil was struck five decades ago.

In 2012, the UAE was ranked third in the Arab world by GDP per capita, which stood at $45,731, according to the Washington-based Institute for International Finance (IIF).

Qatar emerged as the wealthiest Arab country in 2012 and was the richest nation on earth in 2011, with its GDP climbing to an all time high of $182 billion last year because of soaring gas exports and high oil prices. Its population stood at 1.8 million, pushing its GDP per capita to a record high of $101,111.

IIF put Kuwait’s GDP at around $178 billion and population at 3.7 million, with a per capita of $48,108 in 2012.

Official data showed the UAE’s GDP soared to its highest level in current prices last year after a sharp rise in its revenue due to a surge in oil prices.

IMF data showed the country’s public revenue hit an all time high of Dh494.4 billion last year. The 2012 income was nearly 12.5 per cent above the 2011 revenue of about Dh439.6 billion and a breakdown showed crude sales surged to a record high of around Dh395.9 billion in 2012 from nearly Dh361.7 billion in 2011.

Non-hydrocarbon revenue also swelled to Dh98.5 billion from Dh77.9 billion and are projected to continue rising to reach Dh105.3 billion in 2013 and Dh114 billion in 2014.

The increase in the UAE’s revenue last year followed a surge in crude oil prices to their highest average of $112 a barrel while the country’s oil output also remained at one of its highest levels of 2.6 million barrels per day.

The upturn in the country’s economy, specially the non-hydrocarbon sectors, allied with better investment laws and its status as a “safe haven for capital”, to turn the UAE into the second largest FDI recipient in the Middle East after Saudi Arabia. But it has remained the region’s top capital exporter.

Official Arab data showed foreign investors pumped nearly $9.6 billion in capital into the UAE in 2012, allowing it to maintain its position as the second largest Arab recipient of foreign director investment (FDI).

While FDI into Saudi Arabia declined in 2012, the UAE recorded an increase for the third consecutive year and was among a few Arab nations to record high growth in FDI inflow last year, showed the figures by the Kuwaiti-based inter-Arab Investment Guarantee Corporation (IAIGC), a key Arab League organization.

FDI into the UAE sharply fell to around $5.5 billion in 2010 compared with 2009 in line with an international trend in the wake of the 2008 global fiscal distress. But capital rebounded to nearly $7.67 billion in 2011 and continued its recovery in 2012.

The report showed the UAE remained the Arab world’s top capital exporter, pumping nearly $55.5 billion into foreign markets over a period of 32 years.

The funds accounted for nearly 31 per cent of the total Arab FDI outflow of around$175.8 billion during 1980-2011. Saudi Arabia was the second largest Arab capital exporter during that period, with its FDI outflow totaling around $26.5 billion.

The report showed the UAE was outstripped only by developed countries as it was ahead of most capital exporters in the developing nations.

The figures covered only FDI as they did not include capital channeled by the Abu Dhabi Investment Authority (ADIA), one of the world’s largest sovereign wealth funds (SWFs), with assets of between $300-800 billion.