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The UAE's non-oil economy grew by around 5.2 per cent in nominal terms in 2009 to offset a sharp fall in oil prices and keep growth in the country's gross domestic product (GDP), semi-official figures showed yesterday.
From around Dh590 billion in 2008, the non-oil sector's contribution to the nominal GDP swelled to nearly Dh621bn in 2009, an increase of about 5.2 per cent, according to the government-run Emirates Industrial Bank (EIB).
It gave no exact figures for the hydrocarbon sector but its graphical estimates showed its contribution to the GDP fell by around 6.9 per cent to nearly Dh320bn in 2009 from around Dh344bn in 2008.
Despite the plunge in the oil sector because of lower output and prices, the UAE's nominal GDP grew by around 0.8 per cent to nearly Dh942 billion last year from about Dh934 billion in 2008, according to EIB's bulletin.
The study about the UAE economy for 1999-2009 showed the GDP rocketed by nearly 368 per cent during that period from Dh201bn to Dh942bn, with the annual growth standing at as high as 36.8 per cent.
The non-oil sector shot up by more than four times from around Dh151bn to Dh621.7bn, an annual growth of nearly 31 per cent, the report showed.
"During that period, the non-oil manufacturing sector has proved to be the most stable and least affected by economic crises," the report said. "This underscores the need to encourage and support industrial investments with the aim of increasing the share of the productive sectors in the domestic economy and reducing reliance on the oil sector."
The report expected oil prices to be higher in 2010 over its 2009 average of around $61 a barrel as a result of stronger demand and global recovery.
"This means the national economy will perform better this year. Other positive developments are that the banking sector appears to have overcome the crisis by building large provisions which will allow it to achieve better results," the report said.
EIB gave no estimates on growth in the UAE's real GDP in 2009 but Minister of Economy Sultan Al Mansouri said last month it recorded positive growth despite projections by global organisations about a contraction.
In its bulletin last month, EIB said the UAE's real GDP could grow by between four and five per cent in 2010, far higher than the estimated growth in 2009, when the country's oil output was cut by at least 10 per cent.
"The UAE economy is one of a few economies that recorded real growth for the second year running in 2009 following the eruption of the global financial crisis. Such developments have laid the ground for the UAE economy to grow by between four and five per cent in 2010," the study said.
The UAE's real GDP, the second-largest Arab economy after Saudi Arabia, recorded one of its highest growth rates of 7.4 per cent in 2008 to cap nearly seven years of strong growth during the oil boom. In nominal terms, it rocketed by nearly 24.7 per cent mainly because of the surge in crude prices.
In its forecasts issued before the end of 2009, the London-based Economist Intelligence Unit (EIU) expected the UAE economy to grow by 4.1 per cent in 2010 on the back of recovering oil output and expansion in other sectors after the expected completion of several major projects in the country. But the group scaled down its forecasts to 3.4 per cent in a new report to be issued soon.
"We are projecting 3.4 per cent growth for 2010, based on a modest increase in oil output and export values [with a higher oil price], and steady growth in Abu Dhabi," David Butter, EIU's Middle East Editor, told Emirates Business.
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