UAE economy to expand 3.3%: AMF

Strong oil prices will ally with high public spending to boost the UAE economy by around 3.3 per cent in 2011 while the current account will likely record a larger surplus, official forecasts showed on Thursday.

The UAE’s real GDP expanded by about 3.2 per cent and growth will slightly pick up this year, the Abu Dhabi-based Arab Monetary Fund (AMF) said in its latest forecasts about the economies of the UAE and other Arab nations.

“The UAE’s real GDP is projected to rise by about 3.3 per cent this year compared with 3.2 per cent last year…inflation will rise to 4.5 per cent from about one per cent,” the Arab League’s key financial establishment said.

The report, published in the AMF’s quarterly bulletin for January-March, showed strong oil prices would also allow the UAE to record a fiscal surplus of 6.5 per cent of GDP this year. The current account will also register a surplus of nearly 10.4 per cent while there will be a balance of payment surplus of 4.9 per cent.

The UAE, the second largest Arab economy after Saudi Arabia, already had a current account surplus of $23.3 billion or around 7.7 per cent of GDP in 2010 compared with $8.2 billion or three per cent of GDP in 2009.

The balance of payment surplus stood at $7.3 billion last year, nearly 2.4 per cent of GDP, the report showed.

“The surpluses in the external balance were a result of a sharp rise in the UAE’s exports, mainly in oil exports,” the report said.

It showed exports swelled by around $29.7 billion to $221.9 billion in 2010, including nearly $66.8 billion worth of oil exports. Imports grew by nearly $8.6 billion to $158.3 billion, resulting in a trade surplus of $63.6 billion against a surplus of around $42.5 billion in 2009.

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