The UAE Ministry of Economy held a press conference in Dubai to announce the country’s 2011 GDP figures. The Ministry, along with the National Statisics Centre made a comprehensive review of data on economic indicators from the period of 2008-2011.
According to the results, the UAE is currently in a very profitable position, with current oil prices being a major driver of growth. Total GDP estimates for the year 2011 (at current prices) amounted to AED 1.2438 trillion (a growth rate of 19.3%), while the value of GDP of the country for the same year (in real terms) reached to AED 981.7 billion, compared to AED 942.4 billion in 2010.
Economic growth for the first half of 2012, was forecast at 3%, and Ministry officials see this growth rate to remain stable, as they expect oil prices to hover around USD 100. Despite oil prices being a major contributor of growth, it’s important to note a number of growth areas (non-oil sectors), construction and building, and hospitality and tourism, which recorded higher growth rates in 2011 than in the previous year. Trade was a major factor on the non-oil side, with the total number of imports and exports steadily climbing from 2010.
Inflation and real estate were among the biggest obstacles of growth, with consumer prices rising in many areas including food and non-alcoholic beverage prices, goods and services and transportation. Growth in the real estate sector remained at a standstill, as the UAE faces an oversupply of real estate.
When asked about the impact of the recent Iran embargo on UAE-Iran trade, Ministry officials admitted that such action has had an effect on trade and transactions with the country. At the same time officials questioned the effectiveness of such actions, and expressed the need to for leaders to “think differently in terms of embargoes” as these decisions negatively affect ordinary people, many of them poor, in the end.
Another key question addressed during the conference was the impact of the Eurozone crisis on UAE trade with Europe. With many manufacturing companies recently closing down in Europe, Ministry officials stressed the importance of “continuing a strong relationship with Germany,” as the European nation navigates through the crisis.
Looking at the big picture, the UAE’s current economic health is stronger than it was right before the debt crisis hit in 2009, and is in a position for continued growth considering the factors and trends in place.
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