UAE economy set to cross Dh1.5 trillion mark

The UAE economy is expected to continue achieving new records and cross the Dh1.5 trillion mark next year, Washington-based Institute for International Finance, or IIF, predicted. "The UAE economy is to continue its rise to reach $395 billion in 2013 and a record high of around $410 billion in 2014," Wam said, quoting an IIF report.

The report showed the UAE's gross domestic product, or GDP, grew to its highest ever level of around $375 billion in current prices last year from $352 billion in 2011, an increase of about 6.5 per cent. GDP in 2012 was more than double its level of nearly $181 billion in 2006.

The UAE maintained its position as the second-largest Arab economy in 2012 after its GDP swelled by $23 billion in current prices, according to the IIF report. The study showed the UAE has remained the second-largest Arab economy after Saudi Arabia for more than 10 years because of a steady and rapid growth in its GDP as a result of high public spending, a surge in oil prices and a steady increase in private sector investment.

The IIF, which groups major banks in Western countries, said Saudi Arabia remained the largest economy in the region with a GDP of around $640 billion in last year, mainly because of its massive oil output, which reached one of its highest annual averages of 9.8 million barrels per day in 2012.

The report showed the UAE's economy accounted for more than a quarter of the GCC's GDP of $1.482 trillion in 2012. Separately, a report by the Dammam-based Federation of GCC Chambers of Commerce and Industry indicated that the economies of Gulf hydrocarbon producers will grow by around eight per cent to peak at nearly $1.6 trillion in current prices this year, while real growth is projected at about 3.6 per cent.

"Real GDP growth this year, despite global uncertainty, will be a result of strong oil prices and high public spending, which will spur growth in many sectors and encourage the private sector to pump more investment," according to the federation's report.

It said in its semi-annual report that any fresh Western financial crisis would have limited effects on the economic and financial system in the sixnation Gulf Cooperation Council on the grounds that the regional economy has fully recovered and banks have a strong capital and liquidity base. "The GCC's real GDP is expected to grow by 3.6 per cent in 2013 against 5.5 per cent in 2012 despite fears of fresh economic and financial upheavals worldwide," the report said. The federation expected actual public spending in the GCC to rise by 14 per cent this year, adding that this will spur further private sector investment and boost non-oil growth. The growth will widen inflation to around 3.5 per cent from 3.2 per cent in 2012, it said.