Sultan bin Saeed Al Mansouri, Minister of Economy, said preliminary indicators of UAE’s economic performance during 2008 have shown the effect of the international crisis on aggregate constituents of the national economy was relative and minimal.
He said fast and effective actions taken by the government helped some economic sectors regain balance, following the direct difficulties they encountered as a result of the international financial crisis. Such sectors included construction, real estate, financial services and oil. The moves by the government actions helped these sectors into curative and disciplinary processes, which will be beneficial in the long run.
Al Mansouri added the performance of the national economy for 2008 passed through two stages – before the onset of the crisis and after the financial crisis. The national economy, prior to the crisis completed its accelerated growth, supported by high oil prices as much as $147 in July 2008. The price of crude then dropped to its lowest level of $38.6 in December 2008.
Preliminary data issued by the Central Statistics Department of the ministry, show that total gross domestic product (GDP) at fixed prices amounted to Dh535.6 billion in 2008 at a growth rate of 7.4 per cent as against Dh498.7bn and 5.2 per cent in 2007. The GDP at current prices totalled Dh929.4bn in 2008 over Dh729.7bn in 2007.
Several factors contributed to GDP growth in 2008, mainly rising oil prices. The average price of a barrel of oil was estimated at about $94.5 in 2008, compared with an average price of about $69.1 for a barrel in 2007. This amounted to a percentage increase of 36.8 per cent, which positively reflected on the growth of total GDP for 2008.
Contribution of non-oil sectors to GDP has risen to Dh577.5bn in 2008, over Dh467.9bn in 2007.
But the percentage contribution of non-oil decreased to about 62.1 per cent in 2008, compared with 64.1 per cent in 2007.
On the other hand, percentage contribution of the oil sector in total GDP increased from about 35.9 per cent in 2007 to 37.9 per cent in 2008, driven mainly by the hike in oil revenue.
Al Mansouri added the rest of country’s economic variables have continued their steady growth, and total fixed capital formation has increased to about Dh261.4bn during 2008, compared with Dh155.9bn in 2007 – a growth percentage of 67.8 per cent.
Final consumption expenditure hit Dh484bn in 2008 compared with Dh366.5bn in 2007 at a growth percentage of 32 per cent. Total exports of goods and services increased to Dh746.7bn in 2008, compared with Dh693.9bn in 2007 – achieving a growth percentage of 7.6 per cent. Crude oil constituted 36.2 per cent of the commodity exports structure in 2008, where re-export comprised 38.8 per cent, free zones exports 11.2 per cent, oil by products 2.5 per cent, gas 4.5 per cent and other exports 6.8 per cent. On the other side, total imports of goods and services increased to Dh562.6bn in 2008 compared with Dh545.3bn – a growth percentage of 3.2 per cent.
Preliminary data also indicates the UAE achieved a surplus in trade balance to Dh184.1bn in 2008 over Dh148.6bn in 2007. Al Mansouri said he expected the national economy to overcome the effects of the financial crisis during 2009 in the presence of positive economic performance and emergence of signs of revival in financial markets during the second half of this year.
Government spending and execution of infrastructural projects will continue, said Al Mansouri. The government will continue to maintain the increase in infrastructural projects, despite the decrease in oil revenues, he added.
Al Mansouri said he anticipated a certain form of balance to prevail in financial markets, real estate markets and the construction sector.
The Ministry of Economy’s initiatives formed the basis of support for the continuous growth of the UAE economy during 2008, a press statement said.
Such initiatives paved the way for achievement of positive results at the aggregate economic level. The steps helped enhance the ability of the economy to meet local and external challenges, maintaining economic stability, suitability of environment for business, co-operation with all countries and world economic conglomerations and international organisations, it added.
The initiatives also enhanced the competitiveness of the UAE economy and advanced its position regionally and internationally, Al Mansouri said.
The sound economic policies adopted by the country also led to excellent growth rates in various sectors, especially the development of non-oil sectors and its contribution to national GDP, he added.
The ministry has taken necessary steps to ensure attainment of economic success in different sectors and maintaining continuous economic development in the future, Al Mansouri said.
The year 2008 witnessed efforts taken by the ministry to promote the legal framework of economic investments and trade activities in the country, in addition to improvement of the competitive position of the country at both Arab and international levels.
The ministry is currently working on reviewing many existing laws in order to be compatible with the growing needs of the national economy and the increasing role of the private sector, in addition to the need for compatibility of such laws with the obligations of global competition.
Al Mansouri has issued a ministerial decision concerning working with the Unified Economic Activities Directory, in addition to unification of procedures and laws at the UAE level. The directory is a basic step in the Unified Commercial Register Project, which aims to provide a database about licensed economic sectors in the country, their volume and invested capital. Such a database will contribute to the proper and sound economic planning structure. It will also help form, update and modernise economic laws and other legislation in the country, the statement added.
Call for arab CO-operation
Arab countries must take concrete and rapid action at this month’s Arab League Summit towards economic co-operation and integration to face the global financial crisis, the UAE Minister of Economy Sultan bin Saeed Al Mansouri said yesterday.
The minister is leading a delegation to Qatar today to participate in the preparatory meeting of the Arab Economic Council in Doha on March 29.
“At this critical stage of the world economy, the Arab League meeting is critical,” Al Mansouri said. “Now is the time for Arab countries to co-operate and to stand together.”
The ministers will also discuss the UAE’s recommendation to implement an ‘open skies’ policy to boost intra-regional trade and pave the way for additional economic co-operation.
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