DUBAI, 17 January 2006 — The UAE’s gross domestic product (GDP) at current prices is seen to have grown by 17 percent to 443 billion dirhams in 2005 mainly due to the record prices for oil in the international market. The growth compares with the average global growth rate of 4.3 percent forecast by the International Monetary Fund (IMF).
Official figures showed that the GDP of the UAE was AED378.7 billion in 2004 and with the increase in 2005, the country retains its position as the second biggest Arab economy after Saudi Arabia, according to a study made by the Emirates Industrial Bank.
In comparison, Saudi Arabia netted the highest income in OPEC of around $153.3 billion in 2005 and its earnings are expected to climb further to nearly $162 billion this year before slipping to $150.2 billion in 2007.
As for the other GCC members of OPEC, Kuwait’s earnings were put at $39 billion in 2005 and nearly $44.1 billion and $41.1 billion in 2006 and 2007 while Qatar’s income was estimated at $19.1 billion last year and around $23.3 billion and $23.0 billion in the next two years.
The study said non-oil sector and oil sector had contributed to the growth in the UAE, and that the oil revenues helped streamline all non-oil economic sectors.
The oil sector’s contribution to the UAE GDP rose to 176 billion dirhams in 2005 compared with 123.2 billion dirhams in 2004 and represented 39.7 percent of the GDP in 2005 compared with 32.1 percent in 2004.
The input of the non-oil sectors dropped from 67.5 percent to 60.3 percent although their contribution rose from 255.5 billion dirhams in 2004 to 267 billion dirhams in 2005.
The industrial sector (manufacturing) grew by 9.1 percent and its contribution amounted to 54 billion dirhams compared with 49.5 billion dirhams in 2004.
The banking and financial sector achieved record growth rates in 2005, fueled by financial and monetary surpluses resulting from the increase in oil revenues on one hand and the double investment value of the securities market on the other.
The construction sector and the real estate sector contributed strongly to the economy, with 100 billion worth of projects, mainly in Abu Dhabi and Dubai.
Projects announced in the past two years involved investments worth 350 billion dirhams.
Revised estimates by the Energy Information Administration (EIA) of the US Department of Energy showed the income of the UAE and its 10 partners in the Organization of Petroleum Exporting Countries will also remain high in 2007 as crude prices are expected to be above $50 a barrel.
In its earlier scenario around mid 2005, EIA estimated the UAE’s oil revenues at nearly $39 billion last year while it put OPEC’s total crude export earnings at around $429 billion.
But in revised projections issued at the start of this year, EIA put the UAE’s oil export revenues at $45.6 billion in 2005 and expected the income to hit an all-time high of around $53 billion in 2006 before slipping slightly to nearly $52.2 billion in 2007.
Last year’s oil revenues were the highest oil income earned by the UAE since it began pumping crude in early 1960s.
The surge was a result of a sharp increase in oil prices due to strong demand and other factors as well as a rise in the UAE’s crude production, which was estimated at an average 2.4 million barrels per day.