UAE GDP set to bounce back: IMF

The UAE’s GDP is expected to gain  more than $15 billion in current prices this year to maintain its position as the second largest Arab economy after Saudi Arabia, according to the International Monetary Fund (IMF).

The UAE had the second largest Arab GDP in 2009 despite a sharp fall because of lower crude prices and a projected growth will allow it to retain that position in 2010 and 2011, the IMF said in its Middle East report.

From around $223.9 billion in 2009, the country’s nominal GDP is forecast to swell to nearly $239.6 billion in 2010, an increase of about $15.7 billion.

The GDP will gain a further $15.5 billion to grow to nearly $255.1 billion in 2011, its highest ever level in current prices, the report showed.

At that level, the UAE will have the largest Arab economy this year after Saudi Arabia, whose nominal GDP is projected at nearly $434.4 billion in 2010, far higher than its level of about $376.3 billion in 2009.

The nominal GDP of all Gulf oil producers tumbled last year because of lower output and a decline of nearly $30 a barrel in crude prices. It had hit its highest level in most regional nations in 2008 when crude prices climbed to an all-time average of nearly $95 a barrel and Gulf states were pumping at near capacity.

In real terms, regional economies sharply slowed down because of the cut in their oil production in line with OPEC’s collective agreement to trim supplies to prop up prices in the wake of the 2008 global fiscal distress.

The IMF gave no reason for its projection about a surge in the nominal GDP of the UAE and other Gulf states but its figures showed crude prices will likely be higher and their oil production is expected to rebound this year and next year.

In the UAE, crude output slumped to 2.3 million barrels per day in 2009 from nearly 2.6 million bpd in 2008.
The IMF forecast production to climb to around 2.4 million bpd this year and 2.5 million bpd in 2010 apparently because of a recovery in the global economy and subsequently oil demand.

Saudi Arabia, which bore the brunt of Opec’s cuts as it pumps nearly a third of the Cartel’s supplies, is expected to lift production from around 8.4 million bpd in 2009 to 8.5 million bpd this year and 8.9 million bpd in 2011. Its output was as high as 9.2 million bpd in 2008, according to the IMF.

The figures showed Egypt, the most populated Arab nation, had the third largest economy in the Arab region in 2009, standing at $188 billion. It is expected to climb to around $216.8 billion in 2010 and $239.2 billion in 2011.

Algeria, an Opec member, emerged as the fourth largest Arab economy, which stood at around $139.8 billion in current prices last year. The IMF projected the GDP to swell to 159 billion this year and $171.6 billion in 2011.

Kuwait had the fifth largest GDP in the region, standing at $98.4 billion last year. It is forecast to reach $117.3 billion this year and $127.8 billion in 2011.

Qatar had the sixth largest economy of around $98.3 billion in 2009 but it is expected to overtake Kuwait when its nominal GDP will swell to nearly $126.5 billion this year and about $157.9 billion in 2011 because of a sharp increase in its LNG exports, now estimated at 77 million tonnes per year.

Morocco, which does not export oil or gas, was the seventh largest economy in the Arab world, with its nominal GDP standing at around $91.4 billion this year and a projected $91.7 billion in 2010 and $96.3 billion in 2011.

Iraq, which had the second largest GDP in the region before its economy was wrecked by wars, retreated to the eighth place. Its nominal GDP stood at $65.8 billion in 2009 and is forecast by the IMF to climb to around $84.1 billion this year and nearly $92.9 billion in 2011.

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