Last year the economy in the United Arab Emirates grew in real terms by 1.4 percent, after 2009 saw a decrease of 1.6 percent, according to the statistics office. It was noted that an uncertain construction industry might dampen the growth for this year.
The worldwide financial crisis of 2008 resulted in the shelving of projects in the billions for Dubai. This trade hub is famous for the tallest tower in the world and its artificial islands shaped like palms. Oil output also dropped during the crisis, as did prices of crude, which impacted overall growth.
In 2009 the GDP of the UAE fell 1.6 percent, the first economic decrease the Opec member has seen since 1988.
Data indicated that nominal GDP figures hit Dh 1,093 billion (or $297.6 billion) last year, up from the Dh 992.8 billion recorded in 2009.
The stats office noted that higher prices for oil helped to drive the UAE economy out of the crisis that was felt globally. Analysts, on the other hand, insist that recovery was broader.
Other factors that transformed the contraction into growth were tourism and hospitality, among other service sector industries, as well as exports, re-exports and industrial growth, according to Banque Saudi Fransi’s chief economist in Riyadh, John Sfakianakis.
It was also noted that the National Bureau of Statistics moved their economic indicator base or benchmark year from 2000 to 2007.
Analysts said that risks are still present, especially in the property sector. Sfakianakis stated that construction and real estate would continue to exert negative pressures on the economy as they continue to decline.
He added that higher oil production, a booming service sector and industry will boost the UAE economy as it goes “back to basics” and continues on a path to recovery.
The turmoil and unrest spreading across the Arab region has not been seen in the UAE so far. The Minister of the Economy for the Emirates announced that expectations for GDP growth sit at 3 to 3.5 percent for this year.
A March Reuters poll forecasted expansion in the UAE, the third largest oil exporting nation in the world, at 3.4 percent.Paul Holdsworth, Staff Writer, Gulf Jobs Market News