UAE economy up by 7.4 per cent in 2007
UAE Economy Minister HE Sultan bin Saeed Al Mansouri underlined that the UAE economy grew by 7. 4 per cent last year compared to 2006, citing the economic diversification policies adopted by the UAE leadership as a major factor for the growth.
Speaking on the release of economic performance report by the ministry, he added that the economy also continues growth due to the soaring oil prices, contruction boom and inflow of foreign capitals, indicating that "the oil prices grew by 13.1 per cent in 2007 as average price of barrel soared to US$69.1, while non oil sector grew remarkably, leading to the hike of Gross Domestic Product (GDP) by 16.5 per cent to AED698 billion".
He referred to significant contribution of non oil sector to the UAE economy growth and the GDP, indicating that "the non oil sectors contributed 65 per cent, AED455 billion to the GDP in 2007- thanks to the diversified economy".
According to the report prepared by Osama Amir, senior economic researcher at the ministry, the UAE's economy is continuing its strong growth due to many factors, such as the rise in international oil prices, the robust construction sector, and the increasing flow of foreign capital seeking secure and feasible investment opportunities within the country.
"The UAE Government is keen to apply stable legislations and policies that encourage investment and create a conducive development environment", it added.
The report noted that the government has established its economic strategy based on open policies and liberalising its trade to enter into international markets. This strategy supports the UAE Government's objectives of promoting the economy and ensuring long-term sustainable development and progress.
The indexes prepared by the UAE Ministry of Economy reveal that the country's economy has achieved success and is aligned with international economic conditions; resulting in a high growth rate that is attributed to development of socioeconomic sectors in line with the government?s economic diversification agenda.
The UAE economy achieved real growth of 7.4% in 2007 over 2006, attributed to a number of factors including: a rise in oil prices by 13.1%, as barrel average price reached USD 69.1 in 2007, which led to a rise in (GDP) by about AED 698 billion.
Contributions by other non-oil sectors also increased the value of the country's GDP, whose value reached AED 455 billion or 65% of the total GDP achieved in 2007; reflecting the success achieved in the country's economic diversification plan.
Upon review of the country's gross domestic formation in current prices for 2007, It was found that the productive sectors (commodities) have achieved a product of AED 419 billion, or 60% of the gross domestic product; productive service sectors have achieved AED 216 billion, or 31%; while service sectors have achieved AED 63 billion, or 9% of the GDP in 2007.
Crude oil is a leading industry sector which has contributed 35 % of the GDP in 2007, followed by the manufacturing sector, whose diversified activities - whether in oil, liquefied gas, or factories in free zones - contributed 13% to the GDP achieved in 2007.
Development in the food, medicine and building material industries can be noted, as well as concern given to the industrial sector represented in the Emirates Industrial Development Agency, for protection of national industry and contribution to developing the country's resources through industrial investment. These are also recognised for opening new markets for industrial exports, creating a suitable investment climate in the field of manufacturing industries, establishing more industrial areas and cities, and providing incentives for the private sector to enter into industrial fields.
The trade and repair services sector is the third highest contributor to the country's GDP, at 11%. It is an important and organized sector with a long history, in which the private sector plays an important role in providing different goods in the country and managing the development of re-exportation activity. However, retail trade activities need regulatory procedures and measures with regard to giving a bigger role to the specifications and standardization bodies in the country to preserve the type of goods sold and control their prices to maintain consumer rights.
Activity in the real estate sector is considered as one of the prominent trends contributing to the country's economic development, as efforts exerted in this sector are not only limited to constructing residential units, but tremendous efforts have also been exerted in improving the quality of residences by adhering to world-class standards.
Another positive aspect is the prevalence of giant national-owned companies that contribute to real estate developments in all emirates throughout the UAE. Real Estate contributed 8% to the country's GDP, buoyed by the demand in the real estate rental market. This has resulted in a sharp increase in annual rental values for residential units, although increment rates have differed between emirates. The matter requires an in-depth study of the residential market all over the emirates, whether in terms of income levels or the required residence levels.
The report revealed that the size of fixed investments in 2007 increased to AED 144.5 billion compared to AED 121 billion in 2006, and the investment percentage to domestic product reached 20.7% in 2007, which is a high percentage that expresses the country's desire to leverage investment in order to preserve the driving force for the developmental process.
It added that the productive sectors (agriculture, oil, industry, water and electricity, building and construction) accounted for 45.2% of the total investments; whereas productive service sectors (trade, transport and communications, hotels, financial institutions and real estates) accounted for 46.2%; and service sectors (governmental and personal services) accounted for 8.6% of the total investments.
Data relating to sector investments reveal that there are four sectors that account for 63% of the total investment in 2007. The manufacturing industries and real estate sectors come first, whose investment volume - at 35% of the total investments- exceed other sectors (accounting for 17.8% each), whereas most industry investments (amounting to AED 25.8 billion) concentrate on petrochemical, building material, medicine and food industries.
The government encourages the private sector through supporting medium and small projects such as HH Sheikh Khalifa's Fund Foundation for supporting and developing medium and small size projects, and HH Sheikh Mohammed Bin Rashid's Youth Foundation.
The real estate sector, both the public and private sectors, also invested AED 25.8 billion in 2007. The government is keen to help UAE nationals to possess free residential units through residential plans, which provide good living standards and social stability. Federal and local efforts have been exerted to build thousands of residences and villas, and establish modern cities supported by integrated networks of services and facilities.
The transportation sector is another sector that enjoys large scale investments. More than AED 23.1 billion, or 16% of total investments, has been invested to establish developed infrastructure, including a wide range of internal and external road networks, airport expansions, bridge and tunnel construction, and communications.
The government is keen to sustain the success of ICT projects as effective contributors to preserving economic growth rates. This outlook has resulted in providing advanced and high quality IT and online services to people throughout the UAE, with the country ranking first in e-government at the Arab World level.
The crude oil sector comes fourth with AED 15.8 billion in investments. Around 10.9% of the country's total investments in 2007 were in the form of huge projects to develop productive and explored oil fields to ensure continuous oil and gas production; thereby contributing to the stability of prices at international markets.
Due to the nature of the UAE's current economic situation, the government focused its investments on structural building, services and low-income housing projects; accounting for 11.9% of the country's total investments in 2007.
Comparatively, the public sector outlaid 29.8% of total investments in terms of oil and gas extraction projects, and projects in the petro-chemical, and water and electricity industries. The trend of giving a larger role to the private sector has resulted in around 58.3% of residential, medium and small size, hotels, restaurants and trade projects being executed.
Public and private (household) final consumption expenditure is considered a major index to measure standards of living. As data indicates that final consumption is increasing due to improvement in living standards, increasing from AED 330 billion in 2006 to AED 400 billion in 2007; an annual increase of 21.2%. Upon analysis of the total final consumption expenditure, it is noticed that government expenditure has reached 18.5% whereas private (household) expenditure represents 81.5 %.
This continuous rise in private expenditure is due to the annual population increase, the rise in standards of living, rising consumption, as well as the increase in prices for all goods and services.
Foreign trade is considered an influential factor in the country's economy, and represents a high percentage of the GDP, accounting for 161% in 2007. This explains the extent to which the country's economy is linked to the external world in terms of exports and imports, as data reveals the surplus volume in the trade balance increased from AED 141 billion in 2006 to AED 146 billion in 2007.
In response to the fast and consecutive movement of the international economy, the UAE Government is keen to develop its economic legislations and laws. The Ministry of Economy is also keen, as per its objectives, to perform its role in preserving economic stability among unstable economies, providing an appropriate business environment, activating cooperation with international organisations and leveraging economic agreements; basing its future initiatives and vision within these fields.
The ministry has also identified its vision as per government relations with the private sector, which is a balanced affiliation in order to lead the economic development process, as well as achieve sustained economic investment and growth in future.
The role of the government is centered on establishing a framework for economic performance, outlining its control and providing an appropriate environment for the private sector to become more capable and competent within the scope of free competition.
The report stated that the government must also ensure that provision of goods and services does not represent a governmental role; as the government bears the responsibility of establishing economic procedures and reforms that push economic and development processes to realise more growth and progress.
The ministry culminated its efforts in 2007 with the establishment of an Economic Development Strategy, which incorporates a number of platforms to achieve an international competitive economic status for UAE. The Strategy also aims to achieve balanced and stable growth through economic diversity at the national level; to guarantee active participation of UAE nationals in economic activities in both the public and private sectors; and to develop legislation to realise the UAE's benefits. (WAM)
Speaking on the release of economic performance report by the ministry, he added that the economy also continues growth due to the soaring oil prices, contruction boom and inflow of foreign capitals, indicating that "the oil prices grew by 13.1 per cent in 2007 as average price of barrel soared to US$69.1, while non oil sector grew remarkably, leading to the hike of Gross Domestic Product (GDP) by 16.5 per cent to AED698 billion".
He referred to significant contribution of non oil sector to the UAE economy growth and the GDP, indicating that "the non oil sectors contributed 65 per cent, AED455 billion to the GDP in 2007- thanks to the diversified economy".
According to the report prepared by Osama Amir, senior economic researcher at the ministry, the UAE's economy is continuing its strong growth due to many factors, such as the rise in international oil prices, the robust construction sector, and the increasing flow of foreign capital seeking secure and feasible investment opportunities within the country.
"The UAE Government is keen to apply stable legislations and policies that encourage investment and create a conducive development environment", it added.
The report noted that the government has established its economic strategy based on open policies and liberalising its trade to enter into international markets. This strategy supports the UAE Government's objectives of promoting the economy and ensuring long-term sustainable development and progress.
The indexes prepared by the UAE Ministry of Economy reveal that the country's economy has achieved success and is aligned with international economic conditions; resulting in a high growth rate that is attributed to development of socioeconomic sectors in line with the government?s economic diversification agenda.
The UAE economy achieved real growth of 7.4% in 2007 over 2006, attributed to a number of factors including: a rise in oil prices by 13.1%, as barrel average price reached USD 69.1 in 2007, which led to a rise in (GDP) by about AED 698 billion.
Contributions by other non-oil sectors also increased the value of the country's GDP, whose value reached AED 455 billion or 65% of the total GDP achieved in 2007; reflecting the success achieved in the country's economic diversification plan.
Upon review of the country's gross domestic formation in current prices for 2007, It was found that the productive sectors (commodities) have achieved a product of AED 419 billion, or 60% of the gross domestic product; productive service sectors have achieved AED 216 billion, or 31%; while service sectors have achieved AED 63 billion, or 9% of the GDP in 2007.
Crude oil is a leading industry sector which has contributed 35 % of the GDP in 2007, followed by the manufacturing sector, whose diversified activities - whether in oil, liquefied gas, or factories in free zones - contributed 13% to the GDP achieved in 2007.
Development in the food, medicine and building material industries can be noted, as well as concern given to the industrial sector represented in the Emirates Industrial Development Agency, for protection of national industry and contribution to developing the country's resources through industrial investment. These are also recognised for opening new markets for industrial exports, creating a suitable investment climate in the field of manufacturing industries, establishing more industrial areas and cities, and providing incentives for the private sector to enter into industrial fields.
The trade and repair services sector is the third highest contributor to the country's GDP, at 11%. It is an important and organized sector with a long history, in which the private sector plays an important role in providing different goods in the country and managing the development of re-exportation activity. However, retail trade activities need regulatory procedures and measures with regard to giving a bigger role to the specifications and standardization bodies in the country to preserve the type of goods sold and control their prices to maintain consumer rights.
Activity in the real estate sector is considered as one of the prominent trends contributing to the country's economic development, as efforts exerted in this sector are not only limited to constructing residential units, but tremendous efforts have also been exerted in improving the quality of residences by adhering to world-class standards.
Another positive aspect is the prevalence of giant national-owned companies that contribute to real estate developments in all emirates throughout the UAE. Real Estate contributed 8% to the country's GDP, buoyed by the demand in the real estate rental market. This has resulted in a sharp increase in annual rental values for residential units, although increment rates have differed between emirates. The matter requires an in-depth study of the residential market all over the emirates, whether in terms of income levels or the required residence levels.
The report revealed that the size of fixed investments in 2007 increased to AED 144.5 billion compared to AED 121 billion in 2006, and the investment percentage to domestic product reached 20.7% in 2007, which is a high percentage that expresses the country's desire to leverage investment in order to preserve the driving force for the developmental process.
It added that the productive sectors (agriculture, oil, industry, water and electricity, building and construction) accounted for 45.2% of the total investments; whereas productive service sectors (trade, transport and communications, hotels, financial institutions and real estates) accounted for 46.2%; and service sectors (governmental and personal services) accounted for 8.6% of the total investments.
Data relating to sector investments reveal that there are four sectors that account for 63% of the total investment in 2007. The manufacturing industries and real estate sectors come first, whose investment volume - at 35% of the total investments- exceed other sectors (accounting for 17.8% each), whereas most industry investments (amounting to AED 25.8 billion) concentrate on petrochemical, building material, medicine and food industries.
The government encourages the private sector through supporting medium and small projects such as HH Sheikh Khalifa's Fund Foundation for supporting and developing medium and small size projects, and HH Sheikh Mohammed Bin Rashid's Youth Foundation.
The real estate sector, both the public and private sectors, also invested AED 25.8 billion in 2007. The government is keen to help UAE nationals to possess free residential units through residential plans, which provide good living standards and social stability. Federal and local efforts have been exerted to build thousands of residences and villas, and establish modern cities supported by integrated networks of services and facilities.
The transportation sector is another sector that enjoys large scale investments. More than AED 23.1 billion, or 16% of total investments, has been invested to establish developed infrastructure, including a wide range of internal and external road networks, airport expansions, bridge and tunnel construction, and communications.
The government is keen to sustain the success of ICT projects as effective contributors to preserving economic growth rates. This outlook has resulted in providing advanced and high quality IT and online services to people throughout the UAE, with the country ranking first in e-government at the Arab World level.
The crude oil sector comes fourth with AED 15.8 billion in investments. Around 10.9% of the country's total investments in 2007 were in the form of huge projects to develop productive and explored oil fields to ensure continuous oil and gas production; thereby contributing to the stability of prices at international markets.
Due to the nature of the UAE's current economic situation, the government focused its investments on structural building, services and low-income housing projects; accounting for 11.9% of the country's total investments in 2007.
Comparatively, the public sector outlaid 29.8% of total investments in terms of oil and gas extraction projects, and projects in the petro-chemical, and water and electricity industries. The trend of giving a larger role to the private sector has resulted in around 58.3% of residential, medium and small size, hotels, restaurants and trade projects being executed.
Public and private (household) final consumption expenditure is considered a major index to measure standards of living. As data indicates that final consumption is increasing due to improvement in living standards, increasing from AED 330 billion in 2006 to AED 400 billion in 2007; an annual increase of 21.2%. Upon analysis of the total final consumption expenditure, it is noticed that government expenditure has reached 18.5% whereas private (household) expenditure represents 81.5 %.
This continuous rise in private expenditure is due to the annual population increase, the rise in standards of living, rising consumption, as well as the increase in prices for all goods and services.
Foreign trade is considered an influential factor in the country's economy, and represents a high percentage of the GDP, accounting for 161% in 2007. This explains the extent to which the country's economy is linked to the external world in terms of exports and imports, as data reveals the surplus volume in the trade balance increased from AED 141 billion in 2006 to AED 146 billion in 2007.
In response to the fast and consecutive movement of the international economy, the UAE Government is keen to develop its economic legislations and laws. The Ministry of Economy is also keen, as per its objectives, to perform its role in preserving economic stability among unstable economies, providing an appropriate business environment, activating cooperation with international organisations and leveraging economic agreements; basing its future initiatives and vision within these fields.
The ministry has also identified its vision as per government relations with the private sector, which is a balanced affiliation in order to lead the economic development process, as well as achieve sustained economic investment and growth in future.
The role of the government is centered on establishing a framework for economic performance, outlining its control and providing an appropriate environment for the private sector to become more capable and competent within the scope of free competition.
The report stated that the government must also ensure that provision of goods and services does not represent a governmental role; as the government bears the responsibility of establishing economic procedures and reforms that push economic and development processes to realise more growth and progress.
The ministry culminated its efforts in 2007 with the establishment of an Economic Development Strategy, which incorporates a number of platforms to achieve an international competitive economic status for UAE. The Strategy also aims to achieve balanced and stable growth through economic diversity at the national level; to guarantee active participation of UAE nationals in economic activities in both the public and private sectors; and to develop legislation to realise the UAE's benefits. (WAM)
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