UAE economy growth to pick up
The UAE economy swelled by around 3.2 per cent in 2010 and growth it expected to pick up this year and in 2012 on the back of strong oil prices and higher crude output, according to the IMF.
The surge in oil exports will also boost the country’s current account surplus while inflation will also pick up but will remain far below the record annual rate of nearly 12.3 per cent in 2008, the IMF said in its Middle East outlook. After a sharp slowdown in 2009, the country’s economy was back on track and expanded by 3.2 per cent in 2010 as a result of higher oil output and a recovery in most non-oil sectors, mainly trade, construction and services.
Real GDP growth is projected to gain pace and rise by 3.3 per cent this year and around 3.8 per cent in 2012, showed the figures by the Washington-based IMF.
The report also showed the UAE, the second largest Arab economy, recorded a current account surplus of about 7.9 per cent of GDP in 2010 and the balance will likely surge to 13.7 per cent in 2011 before sliding to 10.9 per cent in 2012. Inflation is projected to rise from 0.9 per cent in 2010 to 2.5 per cent in 2011 and 2012 after surging in 2008 due to the weak US dollar, strong domestic demand and a sharp rise in local rents and food prices.
The IMF GDP forecasts for this year are compatible with projections by UAE minister of economy Sultan Al Mansouri, who put it at 2-3.5 per cent. “Our country is firmly on the growth track – this year we are set to grow by 3-3.5 per cent, with inflation well under control,” he told a seminar last week.
“Over the past two years, when the world at large faced the challenges of the global financial crisis – some of it still pestering the European Union – the UAE has evolved as a model of hope and business optimism." Both forecasts are below those by the Saudi American Bank group (Samba) which expects the UAE real GDP to grow by around 4.4 per cent in 2011. Its figures showed the UAE’s real GDP shrank by around 3.5 per cent in 2009 because of lower oil prices and output before it recovered in 2010.
Samba's figures showed the UAE’s GDP in current prices swelled from around $250bn in 2009 to $303bn in 2010 and is projected to climb to about $341bn this year.