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The magic number
The UAE economy has reached a big milestone, according to a new report, and it’s got so many zeroes it will make your head spin.
January 10, 2011 3:37 by Samuel Potter
Just as Kipp was getting ready for nap time, in rolled some economic-type numbers. Normally we ignore them in the hope they’ll go away (they normally do, to be replaced by new numbers the next day), but we think this particular set might have staying power. Why? Well, the UAE’s nominal economy has reportedly climbed above AED 1 trillion for the first time.
An official study from the Emirates Industrial Bank puts that rise down to a rise in crude prices and expansion in non-oil sectors, apparently. Although, doesn’t that just mean they have put the rise down to pretty much everything?
Anyway, EIB is state controlled so the news comes via everyone’s favourite Emirates news agency, the Emirates News Agency. It says that the report says that GDP grew by 6.2 percent in 2010 prices. The oil sector shot up 34.7 percent to AED 346.5 billion while the non-hydrocarbons expanded by around 5.1 percent to AED 653.5 billion.
“The non-oil sector recorded growth last year despite the downturn in some sectors, including real estate and construction growth was mainly driven by the large expansion in the industrial sector and the recovery in the tourism and services sectors,” said the EIB report. “The UAE’s economy recorded growth last year despite the continued squeeze in banks’ domestic credit because of the global crisis and high NPL provisions but such provisions are expected to decline this year and this will help banks improve their performance and extend more loans,” it added, teasingly.
Kipp is always a little skeptical of the numbers we get fed here in the UAE, but since we’re skeptical of pretty much everything, please don’t read too much into it. Anyway despite our natural skepticism, we have to concede that these numbers tie up with a story in last week’s Gulf News. The paper reported that the UAE’s purchasing managers index, an indicator of the performance of the non-oil sector, held steady in December, “indicating solid recovery in the sector.” It’s compiled by HSBC Holdings and Markit Economics. So both the state and the private sector are making recovery noises.
If you want some more localized figures of fun, on Saturday the Dubai Chamber released its annual report in which it revealed that exports and re-exports by the Chamber of Commerce & Industry’s members increased 15.2 per cent in 2010 to Dh214.4 billion against Dh186.1bn for the same period in 2009.
More good news, then. According to Emirates 24-7 the report indicated “positive growth patterns by key economic sectors – a clear tell-tale sign of recovery and better growth prospects being witnessed by the Emirate’s leading economic performers.” Although given the one-time newspapers misuse of other statistics, we’re narrowing our eyes suspiciously again.