The UAE transferred a record Dh175.8 billion to its overseas assets last year as it pushed ahead with long-term plans to take advantage of strong oil prices and build a massive investment empire, official figures showed yesterday.

The surge in the transfers was a result of swelling budget surpluses, a steady rise in gas and petroleum products exports, and a rapid growth in non-oil public income. The figures by the Central Bank showed last year's transfers were far above the official transfers of Dh146.5bn recorded in 2006 and Dh61bn in 2005. They were also more than quadruple the 2003 transfers of only Dh39bn. In previous years when oil prices were weak and the budget was reeling under heavy deficits, the transfer balance was negative as the UAE used to use part of the return on its overseas investments to finance the budget shortfall.

"In 2006, the public funds outflow recorded its highest level of Dh146.5bn and preliminary estimates showed that they swelled further to Dh179.4bn last year," the Central Bank said in its report about the country's balance of payments.

It did not say where the funds were invested but the UAE is believed to control the world's largest sovereign wealth fund – the Abu Dhabi Investment Authority (ADIA). Starting with negligible investments in early 1970s, ADIA's assets are now estimated at between $500-$875bn, most of which were accumulated over the past seven years as a result of a sharp increase in the country's oil output and income.

The Central Bank's report showed the UAE's oil exports hit a record Dh261.4bn in 2007 compared with Dh213.2bn in 2005.

They ranged between Dh70-120bn annually over the previous five years but were as low as Dh30bn in 1998, when crude prices plunged to one of their lowest levels of $10 a barrel.

The surge in the UAE's oil income was accompanied with a steady rise in gas and petroleum products exports, which hit a record Dh28.5bn and Dh20bn respectively in 2007. The rise boosted the country's total hydrocarbon income to its highest level of Dh309.9bn last year compared with Dh257.4bn in 2006. Economists expect the income to increase by at least 20 per cent this year on the grounds oil prices could be at least $30 higher than their 2007 average of $72.

The sharp growth in the oil revenues turned a persistent deficit in the UAE consolidated financial account into a massive surplus, which climbed to a record Dh72.4bn in 2006 and was expected to have exceeded Dh100bn last year.

"The surplus will definitely be higher this year despite an expected increase in actual spending," an economist said.