Real GDP is forecasted to rise by a further 3.5 per cent next year
The Economist Intelligence Unit (EIU) expects that high oil prices are set to push the economy of the UAE to almost Dh 1 trillion in 2010. That record setting level is then expected to rise even more through 2011.
Increases such as those will help the UAE retain its place behind Saudi Arabia; making them the Arab economy second largest and also second place in GDP per capita income, according to the EIU who are under the umbrella of the Economist Group in London.
In terms of percentages, reaching this level translates into approximately 9.3 per cent of nominal growth, compared to 11.9 per cent of contraction in 2009 due to falling oil prices. That growth for 2010 is still well below the marked increases the UAE’s nominal GDP showed in 2007 (a 22 per cent gain) and 2008 (a 36 per cent rise).
EIU data reported that 2009’s nominal GDP of Dh 914.3 billion is expected to reach the record-setting level of Dh 1 trillion. That figure is also forecasted to climb almost 15 per cent and reach Dh 1.15 trillion next year, due to a forecasted increase in crude prices for 2011.
The nation’s real GDP is forecasted to climb 2.6 per cent in 2010 compared to a 2.7 per cent contraction last year caused by a lowered oil output. The EIU stated that last year’s drop was due to low oil prices and a drop in production coupled with a steep slide in the real estate market after the worldwide economic crisis hit.
David Butter, the Middle East editor of the EIU, noted that the economy was expected to grow more steadily in 2011 due to a modest rise in crude production because of a slowly recovering demand. Butter expects real GDP to rise 3.5 per cent next year.
Butter’s data also reported that strong prices for oil should create a wider trade surplus for the UAE, increasing from 2009’s Dh 79.6 billion to almost Dh 143 billion in 2010. The expected level of surplus in 2010 is nearly up to the record setting trade surplus recorded in 2008 of Dh 142.8 billion. In that year the UAE collected over $90 billion in income from crude exports, the highest amount ever thanks to a sharp increase in oil prices.
Trade surpluses in the UAE should hit another new high in 2011, according to the EIU. This peak of almost Dh 157 billion should occur if the forecasted hike in oil prices and output pan outAndrew Reid, Staff Writer, Gulf Jobs Market News