Global Arab Network | UAE may see 3.3% real GDP growth

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UAE may see 3.3% real GDP growth

Global Arab Network - - Rami Alshami

Tuesday, 06 September 2011 14:36

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Global Arab Network - The UAE is expected to achieve a 3.3 per cent real GDP growth in 2011 as the country continues to improve its economy during the year on increased trade , tourism, consumer confidence and rising oil prices, according to a new study and recent forecasts.
"We have left our 2011 real GDP growth forecast of 3.3 per cent unchanged for now, and reiterate our belief that the UAE is among one of the only countries that has seen its growth outlook improve since the start of 2011,â€ Business Monitor International (BMI) said in its latest forecast.
This is also confirmed by reports out of the UAE showing hotel occupancy rates improving and consumer confidence hitting all-time highs at the start of the second quarter, underpinning BMI view that it is not simply the domestic hydrocarbon sector that is benefitting from the regional crisis, it added.
Analysts believe the UAE, a safe and sought-after global investment haven, continues to attract foreign investments, which will play a vital role in reenergising trade and industry. Merrill Lynch in its prediction earlier this year had said the UAE GDP growth was predicted at 3.3 per cent.
The IMF, which expects only a 3.5 per cent rise in the 2011 growth rate, has observed that the regional unrest would benefit the UAE, as the country stands to gain from increased tourism and investments looking for diversification within the region.
BMI recently revised up its forecast for 2011 real GDP growth to 3.3 per cent from 3 per cent previously for the UAE. "It was a result of our view that the country would be among the few to actually benefit from the widespread social unrest unfolding throughout the Middle East and North Africa (MENA) at this juncture.
As one of only a few states, which have so far avoided large-scale demonstrations, the UAE has actually seen its risk profile improve since the start of the year. The outlook for Dubai in particular has been given a boost as a result of the 'Arab Spring', as violent unrest on the streets of Manama solidifies the former's reputation as a relative safe haven in a volatile region, according to BMI.
A more accurate picture of the UAE's economy has emerged following the release of 2009 and 2010 GDP data, and has confirmed BMI views on the extent to which the global financial crisis impacted the country's growth trajectory, BMI said.
According to the National Bureau of Statistics, real GDP contracted 1.7 per cent in 2009, before rebounding to expand 1.4 per cent in 2010. In terms of the importance of different sectors to the country, oil and gas now accounts for 33 per cent the entire economy (compared to 43 per cent in 2001), while the respective figures for construction, real estate and financial services came in at 11 per cent, 10 per cent and 7 per cent (compared to 7 per cent, 10 per cent and 4 per cent respectively in 2001).

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Last Updated on Tuesday, 06 September 2011 16:54

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