SHARJAH,18 August 2005 — High oil and gas prices helped the UAE government narrow its fiscal deficit by 94.1 percent to 855 million dirhams in 2004 from 14.4 billion dirhams in 2003, according to Central Bank figures quoting Ministry of Economy and Planning statistics.
Revenues increased by 22.6 percent in 2004 to 94.4 billion dirhams up from 77.0 billion dirhams in 2003, mainly due to the increase in oil and gas earnings.
The gross national product at constant prices rose to 323.6 billion dirhams in 2004, up 7.4 percent over 2003, the report said. GDP at base price and at constant prices of 2000, rose from 301.3 billion dirhams in 2003 to 323.6 billion dirhams in 2004.
GDP at current prices jumped from 321.75 billion dirhams in 2003 to 378.76 billion dirhams in 2004. GDP at constant prices provides a more accurate picture of the economy as it does not take into account inflation.
The value of total exports and re-exports increased by 23.3 percent in 2004 compared to 2003, reaching 303.9 billion dirhams. This was mainly due to the increase in receipts of exports of the hydrocarbon sector, other exports and re-exports.
The UAE’s balance of payment (BoP) surplus reached 12.8 billion dirhams in 2004 against 4.7 billion dirhams in 2003. Both the trade balance and the current account reflected higher surpluses compared to 2003, while the negative balance of the capital and financial account increased by 8.3 percent.
The increase in value of exports of the hydrocarbon sector was mainly due to increased production volumes resulting from increase in the refining capacity, gas production capacity and expansion in production of condensates on the one hand, and to the increase in oil prices, said the report.
The weighted average price of oil rose from $28.1 a barrel in 2003 to $36.1 a barrel in 2004. This, in turn, led to an increase in value of exports of oil (including condensates which are not included in the country’s production quota set by OPEC) from 81.2 billion dirhams in 2003 to 108.8 billion dirhams in 2004 and in value of exports of gas by 19.9 percent compared with 2003 to 17.2 billion dirhams.
The value of exports of petroleum products also increased to 15.2 billion dirhams in 2004 against 13 billion dirhams in 2003. The value of commodity exports, including those from the free zones, continued to rise over the past few years to reach 60.9 billion dirhams in 2004 compared with 51.2 billion dirhams in 2003.
Exports from the free zones constitute 80 percent of the country’s commodity exports valued at 48 billion dirhams in 2004. The value of re-exports (including non-monetary gold) also rose from 81.6 billion dirhams in 2003 to 101.8 billion dirhams in 2004.
A substantial portion of this increase reflect increased reliance by some GCC countries on the country’s seaports for imports, as a result of the GCC countries Customs Union. The value of total imports FOB (including free zone imports) increased from 168.3 billion dirhams in 2003 to 199 billion dirhams in 2004. This was attributed to rapid construction and building activity, rising domestic and external demand resulting from population increase and the need to meet the requirements of re-exports.
The report said that the geographical distribution of the total value of imports shows that the share of European countries dropped from 30.1 percent in 2003 to 29.8 percent in 2004. Within this group, the share of Germany was the highest, increasing from 7.1 percent to 7.5 percent. The share of Asian countries rose slightly to 45 percent against 44.7 percent in 2003.
