The nominal gross domestic product (or GDP) in the UAE has gone over Dh 1 trillion for 2010. An official study found that this mark was reached due to expanded non-oil industries and a sharp jump in the price of crude.
Economy minister Sultan bin Saeed Al Mansouri made a prediction last November that put the GDP over Dh 1 trillion by the close of 2010.
The UAE’s GDP climbed by about 6.2 percent last year based on current prices. This is better growth in comparison to the 1.3 percent seen in 2009, based on information recently released in an Emirates Industrial Bank (EIB) study.
The EIB is controlled by the state, has been established since 1982 and is a specialized financial firm working for the promotion of economic growth in the UAE. This is done by diversification in income sources and development assistance within the structure of industry.
The EIB economic bulletin issued monthly stated that the GDP in current price for the Emirates crossed the Dh 1 trillion point for the very first time last year. Growth was seen in both the non-oil and oil sectors.
According to the report the oil sector rose by almost 34.7 percent, reaching Dh 346.5 billion for 2010. Non-hydrocarbon industry grew by around 5.1 percent reaching Dh 653.5 billion in 2010, up from Dh 621.7 billion in the previous year.
The report also stated that non-oil industry growth occurred even through the downturns in certain sectors such as real estate. Growth in construction was mainly due to large expansions within industrial firms and recovering services and tourism sectors.
The study stated that there were various external and internal factors that contributed to the rise in the UAE’s GDP, such as increasing oil prices. The UAE has the second highest GDP in the Arab world behind Saudi Arabia.
Further breakdown showed that the industrial sector climbed by around seven percent, going from Dh 119.2 billion for 2009 up to Dh 127.6 billion for 2010. This sector contributed about 12.8 percent to the GDP in 2010, which was the second highest component behind oil.
The EIB noted that the growth reported in the 2010 economy of the UAE happened in spite of the squeeze that remained in domestic credit through the banks. This situation is due to the worldwide crisis and higher Non-Performing Loans (or NPL) provision. Those provisions are forecasted to decline in 2011, a condition that will allow for improved performance at the banks and more loan extensions.
Nations all around the globe were hit hard by the worldwide economic downturn and certain specially advancing economies were hurt even more. The UAE showed a notable hardiness during the crisis, mainly due to strong fundamentals of economics and the government measures that helped to boost confidence.Paul Holdsworth, Staff Writer, Gulf Jobs Market News