Rising oil prices and higher output will result in a $24 billion increase in the nominal GDP of the UAE.
The economy in the United Arab Emirates, which is the largest in the Arab region next to Saudi Arabia, is expected to experience a sharp four percent rebound this year. This growth comes after slower gains last year and a reported contraction in 2009, according to a leading Saudi bank.
Increasing oil production and higher prices should increase the nation’s nominal GDP by almost $24.5 billion. Inflation is also forecasted to accelerate as a result of rising prices for global commodities, according to the economic bulletin from Samba (or the Saudi American Bank Group) for the past quarter.
Samba’s data reports that the real GDP in the UAE dropped by about 1.1 percent in 2009 due to decreased oil output and prices. Recovery of around 1.7 percent came last year. Growth for 2011 is expected to reach four percent.
Nominal GDP grew from about the $223 billion reported in 2009 to $239.8 billion last year and is expected to reach $264.3 billion in 2011, according to Samba.
The UAE is expected to see inflation of around 4 percent in 2011, a significant increase from the 0.9 percent seen last year and 1.2 percent seen in 2009.
In 2008 the inflation in the UAE reached a record rate, hitting around 12.3 percent annually due to soaring food and rent prices, a weakened dollar and escalating domestic demand.
Samba’s report stated that oil production in the UAE is expected to rise from about 2.27 million barrels per day (bpd) last year to 2.4 million bpd this year. The report indicated that this increase will go along with rising crude prices and transform the 2010 budget deficit into a surplus equalling about 5.4 percent of the nation’s GDP for 2011. The current account surplus in the UAE should also swell to 13.9 percent this year, up from around 8.5 percent last year.Paul Holdsworth, Staff Writer, Gulf Jobs Market News