UAE records large BoP surplus in 2010

A surge in oil prices allied with higher private capital inflow and lower outbound funds transfers by the public sector to turn the UAE’s balance of payment deficit into a surplus in 2010, official figures have shown.
The surge also largely widened the country’s current account surplus to around Dh41.2 billion in 2010 from nearly Dh28.8 billion in 2009, showed the figures published in the central bank’s annual report.
The trade surplus leaped to around Dh106 billion from Dh79.6 billion after hydrocarbon exports soared to nearly Dh275.7 billion from Djh249.2 billion following a sharp rise in crude prices last year.
Higher exports along with a large improvement in the capital and financial account turned the country’s balance of payment deficit of around Dh22.5 billion in 2009 to a surplus of Dh26.9 billion in 2010.
“Preliminary estimates of the balance of payments in the UAE indicate an increase in the trade surplus as well as the current account surplus from 2009 to 2010, which was mainly due to the increase in oil prices,” the central bank said.
It said the balance of services remained negative in 2010 with a deficit of around Dh109.9 billion compared to a deficit of Dh100.2 billion.
The services outflow, which includes freight and insurance, transport, travel and
government services, increased from Dh 137.5 billion in 2009 to Dh153 billion in 2010, while the services inflow swelled from around Dh 37.3 billion in 2009 to nearly Dh 43.1 billion in 2010, the report showed
“During the same period, net investment income transferred from abroad
decreased from Dh11.8 billion to Dh5.8 billion, while Employees' transfers abroad declined from Dh35 billion in 2009 to Dh38.8 billion in 2010.… as a result, the surplus in the current account balance increased from around Dh 28.8 billion in 2009 to Dh 41.3 billion in 2010.”
The report showed the private capital balance turned into a surplus of around Dh22.9 billion last year compared to a deficit of nearly Dh15.5 billion in 2009.
The surplus was a result of an increase in direct investment inflow to around Dh7.1 billion in 2010 from Dh4.7 billion in 2009 and a decline in private funds outflow to Dh7.4 billion from Dh10 billion.
Funds outflow by banks also plunged to nearly Dh4.7 billion from Dh36.2 billion while other outbound investments, including loans and deposits, dipped to about Dh4.9 billion from Dh40.8 billion. Public funds outflow also fell to around Dh15.5 billion from Dh20 billion in the same period.
As a result, a deficit of around Dh35.5 billion in the 2009 capital and financial account turned into a surplus of nearly Dh7.4 billion in 2010.
The report showed total exports swelled to around Dh275.7 billion in 2010 from Dh249.2 billion in 2009 while imports increased to nearly Dh592.7 billion from Dh549.7 billion. Hydrocarbon exports included around Dh32 billion worth of gas sales last year compared with Dh30.5 billion in 2009.