UAE GDP to grow 7.7pc per annum
UAE's real Gross Domestic Product growth is forecast to average 7.7 per cent per annum over the next five years, while its budget surplus will stay at an average 6.3 per cent of the GDP.
This upbeat forecast for 2008-12 reflects the buoyant public and private investment expenditure, said a report by Economist Intelligence Unit (EIU).
"While consumer price inflation will fall from its peak 2006 level, primarily because increased housing supply will push down rental costs, the dirham's peg to the dollar will help to contain imported inflation from 2008 as the dollar stabilises," the report said.
Inflation in the UAE, stoked largely by soaring housing costs and a weakening dollar-pegged currency, has been predicted to fall to 8 per cent in 2007 from 9.3 per cent in 2006 by the International Monetary Fund (IMF). HSBC Bank has also predicted that UAE's annual inflation rate would drop to seven per cent in 2007, and further easing to 6.5 per cent in 2008.
The GDP growth forecast by EIU is almost close to the outlook for the GCC given by the IMF. According to its forecast, the GDP of the UAE will grow by 8.2 per cent in 2007 — slower than previous year's 9.7 per cent — to 186.2 billion from $168.5 billion. Qatar will see real growth of 8 per cent to $57.3 billion from 52.7 billion in 2006 while Kuwait’s GDP growth will drop from 5.0 per cent in 2006 to 3.5 per cent and Bahrain’s economy will grow at 6.9 per cent compared to 7.7 per cent. Oman’s GDP will grow at almost the same pace as last year, increasing from 5.9 per cent to 6.0 per cent in 2007.
Abu Dhabi Commercial Bank has said UAE's economy would expand by over eight per cent in 2007. The GCC region would record an average GDP growth of over six per cent in 2007, compared to 7.0 per cent in 2006.
The EIU report said UAE's budget surplus will stay healthy, averaging some 6.3 per cent of GDP on the back of continued high levels of spending in 2008-12 by the government. "Moreover, a large part of the surplus oil revenue from 2004-06 has been placed in overseas funds that can be tapped in times of lower oil-related earnings. Monetary policy will continue to be dictated by the UAE dirham's peg to the US dollar. Furthermore, even if the exchange-rate regime were to be altered, the dirham would be likely to remain closely linked to the dollar."
The report said UAE's current account would continue to record huge surpluses throughout the forecast period. "Although the current account will be supported by rising income credits in the form of returns from the government's massive overseas investment portfolios, as a proportion of GDP the surplus will narrow to an average of 13.4 per cent in 2010-12."
"The government will continue to attempt to attract investment in 2008-12 by offering low tax rates, imposing few trade or exchange controls, providing solid infrastructure and projecting a positive attitude to private-sector investment," the report said. Source
This upbeat forecast for 2008-12 reflects the buoyant public and private investment expenditure, said a report by Economist Intelligence Unit (EIU).
"While consumer price inflation will fall from its peak 2006 level, primarily because increased housing supply will push down rental costs, the dirham's peg to the dollar will help to contain imported inflation from 2008 as the dollar stabilises," the report said.
Inflation in the UAE, stoked largely by soaring housing costs and a weakening dollar-pegged currency, has been predicted to fall to 8 per cent in 2007 from 9.3 per cent in 2006 by the International Monetary Fund (IMF). HSBC Bank has also predicted that UAE's annual inflation rate would drop to seven per cent in 2007, and further easing to 6.5 per cent in 2008.
The GDP growth forecast by EIU is almost close to the outlook for the GCC given by the IMF. According to its forecast, the GDP of the UAE will grow by 8.2 per cent in 2007 — slower than previous year's 9.7 per cent — to 186.2 billion from $168.5 billion. Qatar will see real growth of 8 per cent to $57.3 billion from 52.7 billion in 2006 while Kuwait’s GDP growth will drop from 5.0 per cent in 2006 to 3.5 per cent and Bahrain’s economy will grow at 6.9 per cent compared to 7.7 per cent. Oman’s GDP will grow at almost the same pace as last year, increasing from 5.9 per cent to 6.0 per cent in 2007.
Abu Dhabi Commercial Bank has said UAE's economy would expand by over eight per cent in 2007. The GCC region would record an average GDP growth of over six per cent in 2007, compared to 7.0 per cent in 2006.
The EIU report said UAE's budget surplus will stay healthy, averaging some 6.3 per cent of GDP on the back of continued high levels of spending in 2008-12 by the government. "Moreover, a large part of the surplus oil revenue from 2004-06 has been placed in overseas funds that can be tapped in times of lower oil-related earnings. Monetary policy will continue to be dictated by the UAE dirham's peg to the US dollar. Furthermore, even if the exchange-rate regime were to be altered, the dirham would be likely to remain closely linked to the dollar."
The report said UAE's current account would continue to record huge surpluses throughout the forecast period. "Although the current account will be supported by rising income credits in the form of returns from the government's massive overseas investment portfolios, as a proportion of GDP the surplus will narrow to an average of 13.4 per cent in 2010-12."
"The government will continue to attempt to attract investment in 2008-12 by offering low tax rates, imposing few trade or exchange controls, providing solid infrastructure and projecting a positive attitude to private-sector investment," the report said. Source
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