UAE econ­omy set to cross Dh1.5 tril­lion mark

The Pak Banker - - INTERNATIONAL BUSINESS/SPORTS -

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.

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