DUBAI, 21 January 2006 — Saudi Arabia posted the fifth highest real economic growth in the Arab World during 2005, preceded by Bahrain, the UAE, Egypt and Kuwait, according to a report compiled by the Eonomic and Social Commission for Western Asia (ESCWA), a UN agency.
The growth rates of Bahrain at seven percent, followed by the UAE and Egypt at six percent each, Kuwait with 5.5 percent, Saudi Arabia and Qatar with five percent each and Oman with 4.5 percent, compares with the 4.3 percent average global growth forecast by the International Monetary Fund (IMF).
The higher growth in the Arab World was attributed to the record high prices of oil in the international market.
According to the ESCWA report, the UAE’s growth in real terms, after calculating inflation and value of the dollar.
Egypt was close to the UAE, with a growth of 6.0 percent while Palestine recorded the lowest growth rate of around 0.4 percent last year.
The UAE’s real GDP peaked at around $87.3 billion in 2005 compared with 82.4 billion in 2004 and nearly 79.2 billion in 2003. In 2002, it stood at around 74 billion while it was estimated at nearly 72.6 billion in 2001.
In current prices, the UAE economy raced by about 11.9 percent to $115.5 billion in 2005 following a sharp increase in oil prices to an average $50 a barrel from $36 in 2004. The UAE’s oil output also soared to one of its highest levels of nearly 2.4 million bpd in 2005 although it remained far below its sustainable capacity since the country is sticking to OPEC production policy.
According to the Ministry of Economy and Planning, the non-oil sector performed even better than the oil sector, growing by 12.1 percent last year. Growth covered almost all sectors, including manufacturing, water and electricity, services, farming and construction.
Experts attributed the upsurge in non-oil sectors to higher public spending due to strong oil prices and a sharp increase in private investment, mainly in industry, real estate and construction.