UAE 2011 real GDP growth seen at 4.2 percent

UAE 2011 real GDP growth seen at 4.2 percent

Robust oil prices, diversification key drivers; More optimistic than Reuters poll of analysts; Stats office may revise 2010 GDP data next month

October 18, 2011 4:44 by Reuters

The United Arab Emirates’ economy is expected to grow by 4.2 percent in real terms this year, much faster than in 2010, helped by robust oil prices, the National Bureau of Statistics said on Tuesday, citing preliminary data.

Asked about key drivers of economic growth this year, Sufyan Daghra, economic statistics expert at the National Bureau of Statistics, said: “The increase in petroleum prices…and the impact of diversification and other economic activities.”

He told a news conference, “There was recovery that we can feel in the economic sector.”

Real gross domestic product of the world’s No. 4 oil exporter expanded by 1.4 percent in 2010, after a 1.6 percent contraction in the previous year due to the global financial crisis, which slashed oil output and burst a local property bubble.

In 2011, the property sector has remained weak because of an inflow of new developments to the market, and bank lending has stayed slow following the announcement of a $25 billion debt restructuring at Dubai’s flagship conglomerate Dubai World in 2010.

But the UAE has benefited from strong trade flows, thanks to fast growth in Asia, and a rise in tourism as the country avoided a wave of regional social unrest in neighbouring Bahrain, Oman and Yemen. The government is promoting non-oil industries such as tourism, financial services and even aerospace.

The statistics office’s projection is more optimistic than a Reuters poll of analysts in September, which forecast the UAE would expand by 3.8 percent this year.

Daghra also said the statistics office might revise the UAE’s 2010 GDP data next month following a recent revision by Abu Dhabi, one of seven emirates in the UAE federation, which accounts for 90 percent of UAE oil output.