A marked increase in the UAE's private consumption, investments and net exports will bring the country's nominal GDP to Dh843 billion by the end of this year, eight per cent higher than the estimated Dh780bn in 2009.

The country is also set to see a two per cent employment growth, with Dubai touching positive territory again. Figures from the Dubai Chamber of Commerce and Industry show that the UAE's private spending, which dropped 12.5 per cent last year, is expected to increase by two per cent this year, while investments and net exports are slated to go up by 13 per cent and 28 per cent, respectively.

The data, obtained by Emirates Business, shows that private expenditure – down from Dh425bn in 2008 to Dh372bn in 2009 – will climb up to Dh380bn this year. Investments will reach Dh252bn this year from Dh224bn in 2009 and Dh316bn in 2008. Net exports will touch Dh90bn from Dh70bn in 2009 and Dh107bn in 2008.

Government expenditure, however, will see a 23 per cent dip from Dh155bn in 2009 to Dh120bn this year as the fiscal stimulus starts easing up. Figures from the chamber show that state spending went up by 80 per cent in 2009 from Dh86bn to mitigate the impact of the economic crisis.

Despite the easing of the stimulus package, the government agency said UAE firms are expected to maintain their demand for labour. Because of this and given the competitive nature of the labour market in the UAE, it expects an increase in real wages, which will result in a more sustained level of private consumption.

"It's a bit slow this year and inflation is low, so increase in real wages may not happen this year, but it is likely beginning next year," Ehsan Khoman, economic researcher at Dubai Chamber, said on the sidelines of a seminar yesterday. "The fall in the UAE's employment [rate] has reduced private consumption in the short-term and as a result inflation has fallen. However, increase in government expenditure is anticipated to lead to a pick-up in aggregate demand, with firms maintaining their demand for labour and hence higher population levels are projected."

According to the International Labour Organisation (ILO), employment growth in the UAE dropped by five per cent last year. The Dubai Chamber – citing the ILO report – forecast that UAE employment will grow by two per cent next year.