Strong crude prices allied with high oil production by the UAE to boost its nominal gross domestic product by nearly $62 billion in 2011 and allow it to maintain its position as the second largest Arab economy.
Oil prices averaged a record high of nearly $110 in 2011 while the UAE pumped around 2.6 million barrels per day, one of its highest crude production levels since it began exporting oil five decades ago.
Given its heavy reliance on oil exports, higher prices and output expanded the UAE’s GDP by $62 billion or around 20.8 per cent to push it to a record high of $360 billion in 2011 from $298 billion in 2010, the Washington-based International Monetary Fund said in its latest review of the UAE.
The surge meant that the UAE maintained its position as the largest Arab economy after Saudi Arabia and also had the second highest GDP per capita income in the Middle East after Qatar.
The UAE’s nominal GDP had climbed to a record high of Dh,1156 billion in 2008 on the back of strong crude prices before dipping to nearly Dh993 billion ion 2009 following a steep fall in oil prices.
It rebounded to Dh1,093 billion in 2011 and climbed to an all time high of Dh1,323 billion in 2011. IMF projected GDP to hit another record of Dh1,419 billion in current prices in 2012 as it expects oil prices to remain high.
The surge in crude prices by nearly 50 per cent in 2011 along with high production pushed the country’s hydrocarbon export earnings to a record $112 billion last year, nearly 50 per cent above the 2010 income of $75 billion. The report forecast revenue to swell further to $122 billion in 2012.
Despite a 23 peer cent rise in imports, the UAE basked in its highest ever current account surplus of $33.3 billion in 2011, more than triple the $9.1 billion balance recorded in the previous year, the IMF report showed.
The surge boosted the balance ratio of GDP to 9.2 per cent in 2011 from 3.1 per cent in 2012. The report expected the surplus to peak at $40 billion in 2012, nearly 10.3 per cent of GDP.
The UAE has been the second largest earner in OPEC after Saudi Arabia and it has remained among the world’s 10 top oil exporters. It also controls the fifth proven crude deposits of around 98 billion barrels.
In its annual report released this week, the Central Bank said robust oil prices also sharply expanded the country’s trade balance surplus to nearly Dh291.9 billion last year from about Dh179.8 billion in 2010 despite a surge in imports to Dh742.3 billion from Dh604.3 billion.
Its current account breakdown showed transfers by expatriate workers grew to around Dh41.2 billion from Dh38.8 billion.
Net direct investment rose to Dh20.2 billion from Dh12.8 billion after inward capital surged to Dh28.2 billion from Dh20.2 billion. Outward direct investment edged up slightly to Dheight billion from Dh7.4 billion.
Enterprises of public sector, which involves government transfers to funds abroad, shot up by more than 10 times to Dh95 billion in 2011 from Dh10 billion in 2011 apparently because of a large budget surplus.
The report showed the UAE
’s overall balance of payment recorded a surplus of Dh16.6 billion in 2011 compared with Dh26.9 billion in 2010.