UAE Growth Forecasts Revised as Oil Rises
The National Bank of Abu Dhabi (NBAD) made revisions to growth forecasts for the UAE economy, moving expectations from 2.6 percent to 3.3 percent as the Emirates produce greater amounts of oil selling for higher prices.
Rising oil output has bumped up the estimates for this year, but chief economist at NBAD Dr Giyas Gokkent stated that limitations in 2013 have resulted in y-o-y projections of 3.2 percent.
Dr Gokkent commented on Iran’s declining output and the effect that has on the output of other nations in the region. Current growth forecasts would be revised at higher levels should current conditions extend into the future. Real GDP growth y-o-y went from just 1.3 percent in 2010 to 4.2 percent last year, driven largely by oil prices. Dubai’s y-o-y growth of 3.4 percent was a result of increased retail and wholesale trade, and more activity in transport and manufacturing sectors.
GDP in the UAE increased 19.3 percent year-on-year, reaching $339bn on the back on rising oil prices, which surged to $105 per barrel. This 35 percent price increase also drove Abu Dhabi’s share of UAE GDP to 64.8 percent, up from 59.5 percent the previous year.
Crude output in the UAE rose five percent in the opening half of this year, moving from 2.7mn bpd to 2.8mn bpd. Output is expected to reach 3mn bpd by the close of this year.
Dr Gokkent stated that oil production is forecasted to reach 3.5mn bpd over the next five years, with $60bn in investments planned.
Non Oil Trade in UAE Increases by 2.3 Percent in First Quarter
Official data confirmed the non oil foreign trade for the UAE continued to rise over the opening quarter of this year. FCA data indicated that UAE exports grew by 38 percent in Q1, with exports moving from Dh 24.8bn last year to Dh 34.3bn, an increase of Dh 9.5bn.
Imports rose by 6 percent in the same period, with non-oil imports jumping from Dh 147bn in Q1 of 2011 to Dh 156.3bn in Q1 of 2012. Re-exports hit Dh 47.8bn in that period.
Non oil foreign trade grew by 2.3 percent in Q1, according to the FCA. Preliminary data indicated that total non oil foreign trade moved from Dh 233bn in January to March 2011, to Dh 238.4bn in January to March 2012. Weight wise, total foreign trade figures reached 23.4mn tonnes in Q1 2012, with 13.1mn tonnes of imports, exports at 8.4mn tonnes and re-exports at 2.3mn tonnes.
Consignments processed by various customs outlets, including exports, imports and re-exports, hit around 99,000 tonnes for a daily average, or 12,000 tonners per hour on average.
Non oil foreign trade in the UAE reached Dh 83.5bn in March, with imports totalling DH 54.7bn, exports at Dh 12.2bn and re-exports at Dh 16.6bn, according to the FCA.
In terms of regional trade, Asia-Pacific continues to the UAE’s top trading partner. Total trade between these regions hit Dh 110.2bn or 47 percent of the UAE’s total trade. Europe represented 25 percent of total trade at Dh 58.8bn, and the MENA region captured 13 percent of total trade at Dh 31bn. The Americas and Caribbean reached 9 percent of total trade at Dh 21.3bn, while Central & Western Africa represented 2.9 percent of total trade at Dh 6.7bn. Comes a rounded out the regions, with Dh 6.3bn or 2.7 percent of total trade.
Total non oil trade with the GCC reached Dh 18.6bn in Q1 2012, with imports totalling Dh 6.9bn, exports at Dh 4.8bn and re-exports equalling Dh6.9bn.
Of the GCC nations, Saudi Arabia remained the UAE’s top trading partner, with Dh 7.1bn in total trade. Oman and the UAE traded Dh 4.7bn and Kuwait represented Dh 2.4bn in trade. Qatar and the UAE reached Dh 2.4bn, while trade with Bahrain came in at Dh 2bn.
Total foreign trade with Arab nations reached Dh 31.8bn in the opening quarter, including Dh 14.1bn in imports, Dh 7bn in exports and Dh 10.7bn in re-exports.
Gold took top spot for imported goods with Dh 26.5bn in trade, while diamonds totalled Dh 11.7bn, automobiles reached Dh 9bn and jewelry totalled Dh 7.1bn.
Gold also came in at the top of exports, with Dh 17.6bn. Polyethylene and crude forms of propylene polymers were the second highest export at Dh 3.8bn, while jewels and jewelry totalled Dh 1.1bn and petroleum, along with other oils, totalled Dh 812mn in exports.
Re-exports saw diamonds at the top during the opening quarter, with Dh 12bn traded. Jewels and jewelry totalled Dh 3.6bn, and phones equalled Dh 3.4bn in trade. Total trade for markets and free zones reached Dh 3.8bn in the opening quarter.
Higher Levels of FDI Inflow for Dubai in First Half of 2012
Around AED 16.5bn in FDI (or foreign direct investment) came into Dubai over the first six months of this year, based on data from Dubai FDI in the DED. Initiation of 115 FDI projects took place between January and June 2012, involving 113 businesses and accounting for around 1.5 percent of the world’s total FDI.
The highest amount of average capital investment occurred in January, while April saw the most projects initiated at 26. Total FDI figures increased by 7 percent over the same period in 2011. Larger projects boosted the FDI inflow this year.
Trends in FDI support Dubai’s status as the destination of choice for global investments, and indicate that confidence in the emirate’s growth prospects spreads across key economic sectors.
Dubai FDI CEO Fahad Al Gergawi noted that an increasing number of investors and companies from around the world are recognizing the growth opportunities found exclusively in Dubai. Al Gergawi draws this conclusion from the swelling number of multinational firms moving into Dubai and the FDI increases across various industries in Dubai.
Nearly 93.9 percent of those FDI projects started in the first half of the year involve new investments, up from 88 percent of those projects initiated in the opening half of 2011. In addition, nearly 45 percent of those projects involved businesses newly established in Dubai.Paul Holdsworth, Staff Writer, Gulf Jobs Market News