UAE reaffirms 7.4% real growth for 2007

The UAE Ministry of Economy yesterday reaffirmed that the real economic growth during last year had stood at 7.4 per cent.

It denied reports that it had downgraded the growth rate. "The Ministry has not released any new report about economic growth in the country other than it issued in last March in which it set real economic growth at 7.4 per cent in 2007 compared to 2006," said Rashid Al Suwaidi, Assistant Undersecretary for Planning and Statistics.

An agency report said the ministry had revised down its 2007 economic growth rate to an estimated 5.2 per cent from an earlier 7.6 per cent. The agency said real gross domestic product of the world's fifth-largest oil exporter hit Dh498.70 billion in 2007 compared to Dh473.91bn in 2006.

In March, the ministry had said the economy grew 7.6 per cent as construction, industry and trade sectors surged.

The UAE grew 11.6 per cent in 2006, the revised data showed, according to the agency. The UAE has been trying to diversify its economy from oil.

GDP at current prices was Dh729.73bn last year, up 16.8 per cent from the year earlier, the agency said.

The UAE Central Bank said in another report that the commercial banks increased lending to residents by 42 per cent in 2007 to Dh626.7bn, stoking record inflation.

M1 money supply growth increased an annual 51 per cent in December 2007, up from 15 per cent a year earlier, the UAE Central Bank said on its website yesterday.

The Central Bank said the UAE's population grew 6.1 per cent in 2007 to 4.49 million people, led by an influx of new residents into Dubai amid strong growth in the construction sector. Dubai posted a 7.7 per cent growth in population to 1.48 million people last year, the central bank said in its 2007 annual report, citing data from the UAE Ministry of Economy.

Total employees in the UAE grew 7.9 per cent to 3.1 million, the bank said.

The construction sector accounted for a fifth of employees last year, with its total workforce growing 7.9 per cent over 2006, it said.

In Abu Dhabi, a population of 1.49 million in 2007 was 4.4 per cent higher than 2006. (Wam with inputs from Reuters)

Home mortgages double

Mortgage lending in the UAE almost doubled in 2007 amid a building boom, central bank data showed yesterday.

Total home loans at the end of December were worth Dh58.86 billion compared to Dh31.02 billion a year earlier, the central bank said in a quarterly report on its website.

The UAE's burgeoning mortgage business has surged since 2002 as the second-largest Arab economy increased on a near seven-fold rise in oil prices and some emirates, including Dubai and Abu Dhabi, began allowing foreigners to invest in properties.

Banks have boosted their mortgage offerings, encroaching on the market share of home financiers like Amlak Finance, which has been expanding in new markets, including Egypt and Saudi Arabia, as competition intensifies at home.

The Dubai-based Islamic mortgage lender posted a 74 per cent jump in second-quarter profit this year as its home loan business grew.

Emirates NBD, the Gulf's biggest bank by assets, said in February it's expected to almost double mortgage lending this year as lower interest rates encourage home buyers.

Residential mortgage growth was less noticeable before 2006. (Reuters)